Factors Affecting Natural Gas Prices

It is important to know the facts around Higher and Lower Natural Gas Prices.

Natural Gas prices are a function of market supply and demand. Due to limited alternatives for natural gas consumption or production in the short run, changes in supply or demand over a short period often result in large price movements to bring supply and demand back into balance.

Factors on the supply side that may affect prices include variations in natural gas production, net imports, or storage levels. Increases in supply tend to pull prices down, while decreases in supply tend to push prices up.

Factors on the demand side include economic growth, winter and summer weather, and oil prices. Higher demand tends to lead to higher prices, while lower demand can lead to lower prices.

  1. Domestic Supply and Prices Can be Cyclical
  2. Severe Weather Can Disrupt Production
  3. Pipeline Imports from Canada Are the Second Largest Source of Supply
  4. Liquefied Natural Gas (LNG) Imports May Increase
  5. Strong Economic Growth Can Drive Up Natural Gas Demand and Prices
  6. Winter Weather Strongly Influences Residential and Commercial Demand
  7. Hot Summer Weather Can Increase Power Plant Demand for Gas
  8. Natural Gas Supplies Held in Storage Play a Key Role in Meeting Peak Demand
  9. Oil Prices Can Influence Natural Gas Prices

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About chiefenergy

Founded in 1977, Chief Energy Corp. (an Energy Service Company - ESCO) and a Heating Oil Delivery company provides a comprehensive line-up of energy services. Our team works hard to assure our pricing is one of the most competitive in the industry.
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6 Responses to Factors Affecting Natural Gas Prices

  1. Nancy says:

    Much appreciated for the information and share!

  2. Issac says:

    hello, outstanding article, and a very good understand! one for my bookmarks.

  3. Nancy says:

    Thanks for the share!

  4. Appreciated the share!

  5. Shari Joyce says:

    Would you mind if I shared this article on my blog? I would certainly give you credit and a link back to your website. Many thanks, and don’t hesitate to let me know here, or email me!

  6. Vivian says:

    That’s really interesting. Thanks for posting all the great information! Had never thought of it all that way before.

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