Tags: natural | gas | prices | consumers

Natural Gas Prices Surge; Consumers Will Pay Up

Monday, 27 Jan 2014 06:46 AM

By Dan Weil

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The U.S. cold spell helped send natural gas prices to a 3 ½-year high Friday amid strong demand for heating fuel. That's bad news for consumers.

February natural gas futures soared almost 10 percent on the Nymex Friday to settle at $5.182 per million British Thermal Units, the highest settlement since June 2010. Natural gas futures are up almost 20 percent so far this year.

Forecasts call for continued cold weather in much of the country until early next month. That has raised concerns about whether heating fuel supply will be adequate to make it through the winter, CNBC reports.

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"This cold period is just extending . . . further out into the future," Matt Smith, an analyst at energy consulting firm Schneider Electric, tells The Wall Street Journal.

"You're seeing weather advisories from Canada down to the Gulf Coast, freezing conditions across virtually the entire U.S."

Heating fuel demand reportedly has jumped to as much as five times higher than normal for this period of the year, according to CNBC.

And consumers are taking it on the chin with natural gas prices rising, as approximately 50 percent of U.S. homes are heated with it.

Consumers will pay an average of $665 for natural gas to heat their homes this winter, about 10 percent more than last year, the U.S. Energy Information Administration forecasts.

But given the vicious cold snap on the East Coast, traders and analysts say bills for consumers there could be even higher, CNBC reports.

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