Friday, December 01, 2006
Heating bills to follow as cold weather drifts in across USA
By Barbara Hagenbaugh
WASHINGTON â€” Natural gas prices are soaring on commodity markets, a development that could lead to higher-than-expected heating bills this winter.
Natural gas prices trading for delivery in January rose 11% in November and are trading near a 10-month high.
Much of the gain has come in the last week. The reason: Cold weather is sweeping across the USA, leading to increased demand and, thus, higher prices.
“It's cold, and it's cold across a large swath of the country. So demand is up,” says Rusty Braziel, managing director of Bentek Energy in Golden, Colo.
Nationwide, natural gas demand has risen 15% since the day after Thanksgiving, according to Bentek data. Demand in the western half of the USA, which has seen the initial burst of cold weather, “has gone off the scale,” Braziel says.
Meteorologists warn that the wintry weather will hit the East Coast this weekend.
Rising heating demand is leading to a faster-than-anticipated decline in natural gas inventories. Still, inventories are up 6% from a year ago and are 7% higher than the five-year average for this time of year, according to data from the Energy Department out Thursday.