Cold weather to push up BGE natural gas prices
A cold weather forecast has pulled natural gas prices up from an eight-year low, Bloomberg reports. That will probably be reflected in BGE's residential natural gas price for January.
But while prices may have notched up, they're rising from really low levels. The recession and a worldwide natural-gas glut have depressed gas prices and profits. The default natural gas price for BGE customers this month (the floating price you get if you don't lock in with another supplier) is 63.71 cents per therm, the lowest price for December since at least 2003.
The best one-year fixed price from competitive suppliers listed on the Office of People's Counsel Web site (look on the mid-right side of the page; click on "Natural Gas Retail Supplier Prices") is from Washington Gas Energy Services, at 66 cents per therm.
Bloomberg:
Gas advanced 3.2 percent after the National Weather Service reduced its temperature forecasts for eastern states from Dec. 11 to Dec. 15. Gas prices were trading at the lowest level since 2002 for the beginning of December.“Cold weather is the primary driver of gas prices,” said Brad Florer, a trader at Kottke Associates Inc., an energy trading firm in Louisville, Kentucky. “It looks like below- normal temperatures are going to hang on for most of the month, and that’s stifling the selling and lifting gas off the bottom.”
Comments
All this Gas and Electric talk continues to baffle my brain.
One day we are told prices are going down and the next day we are being warned prices are going up.
Posted by: Carole | December 7, 2010 9:39 AM
So Jay, do you recommend BGE customers to lock into a rate with Washington Gas Energy Services? I am skeptical of whether in the long run I will really save money by locking into a fix rate for 1 - 2 years. An article clearly helping customers identify true or unrealized savings would be very beneficial to a customer like me that likes to keep things simple. There should be available data to see whether customers who locked in their rate versus those who did not and what if any savings resulted.
Hi Brad. Good question. BGE's default price more or less floats with the market, which is why I have not locked in in the declining market of recent years. People who locked in in 2008 really paid through the nose, and people who locked in in 2009 paid more than they needed to. At some point, however, gas prices are going to bottom and it might make sense to lock in with WGES or somebody else. Here's the big problem: Unless I missed it, none of these companies let you lock in for more than two years, so residential users are very limited in how much they can hedge. If somebody could sell me a five-year gas deal for 75 cents I would take it.
Posted by: Brad | December 7, 2010 10:26 AM
Funny but not so funny: While natural gas prices have been at an all time low on the wholesale market the PSC let BG&E rape it's costumers and make record profits. Each BG&E costumer should get a huge rebate or free gas for two months (Dec and Jan) to pay us all back. Shame on a gutless Governor O'Malley.
Posted by: animicrazy | December 7, 2010 2:07 PM
could a pipleline to Northern PA gas fields be any easier to build on existing RR Right of Way? The prices are plunging because they keep finding more.
Posted by: mike | December 16, 2010 6:52 PM