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Natural-Gas Inventories Remain High

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Natural gas prices.
(Photo: ©iStockphoto.com/PaulFleet)

Paul Partyka |

WASHINGTON — Natural-gas inventories are expected to remain high through 2011, resulting in an average Henry Hub natural-gas spot price of $4.16 per million Btu (MMBtu) for the year, $0.22 per MMBtu lower than the 2010 average, according to the Energy Information Administration’s (EIA) latest short-term energy outlook.
EIA also expects that total natural-gas consumption will remain flat through 2011. Residential and commercial consumption are expected to decline by 0.3% and 2.4% respectively, primarily because of changes to EIA’s methodology for collecting and reporting natural-gas consumption data.

The Henry Hub spot price averaged $4.49 per MMBtu in January, $0.24 per MMBtu greater than the average spot price in December.
Residential propane prices are $2.827 per gallon (as of Feb. 7), up $0.087 from last month. Wholesale propane prices are $1.411, down $0.004 from last month.
Even with massive winter storms wreaking havoc over parts of the country, EIA forecasts average household expenditures for space-heating fuels to total $991 during the 2010-2011 winter season, only $24 higher than last year.
EIA projects higher expenditures for heating oil and propane, flat expenditures for electricity, and lower expenditures for natural gas.
A forecast for milder weather in the South and the West compared with the 2009-2010 winter leads to lower fuel consumption in those areas.
Natural gas is usually the main concern for operators at this time of year, but rising regular-grade motor gasoline retail prices are probably on the mind of many. Driving to the laundry is becoming an expensive endeavor.
There is significant uncertainly about short- and long-term price projections. EIA expects gasoline prices to average $3.15 per gallon in 2011, but there is a 35% probability that the national monthly average retail price could exceed $3.50 per gallon during summer 2011, and about a 10% probability that it could exceed $4.

About the author

Paul Partyka

American Coin-Op

Paul Partyka was editor of American Coin-Op from 1997 through May 2011.

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