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