Energy Solutions, Inc., discusses forward natural gas NYMEX prices from 2012 through 2016
Ongoing growth in natural gas production, the year-over-year storage inventory surplus created by an extremely mild winter, and the stay of the implementation of the Cross-State Air Pollution Rule (CSAPR) have caused numerous financial firms to reduce their forward price forecasts over the past two months. Most forecasts have been slashed by around $1 per MMBtu. As a result, the average annual 2012 price forecasts at the Henry Hub in Louisiana tend to range from $2.50-$3.50 per MMBtu. By comparison, the average annual forward 2012 natural gas NYMEX price as of March 7, 2012, was $2.640 per MMBtu.
Similarly, 2013 and 2014 price forecasts also have been reduced. For 2013, average annual natural gas price forecasts at the Henry Hub in Louisiana tend to range from $3.25-$4.25 per MMBtu, and for 2014, average annual natural gas price forecasts at the Henry Hub in Louisiana tend to range from $3.50-$4.50 per MMBtu. By comparison, the average annual forward 2013 and 2014 natural gas NYMEX price as of March 7, 2012, was $3.411 per MMBtu, and $3.834 per MMBtu, respectively.
By 2015, average annual natural gas price forecasts climb back toward $5 per MMBtu, and by 2016, some believe prices will be over $5 per MMBtu on a consistent basis. For comparison purposes, the average annual forward 2015 and 2016 natural gas NYMEX price as of March 7, 2012, was $4.106 per MMBtu, and $4.344 per MMBtu, respectively.
According to Valerie Wood, President of Energy Solutions, Inc., “The potential for a significant price decline in the fall of 2012 will increase if summer temperatures are moderate, and there is a reduced need to call upon natural gas-fired electric generation to meet air conditioning needs.”
Many are comparing current conditions to those in 2009, when the front-month natural gas NYMEX contract fell from around $4 per MMBtu in early August to $2.409 per MMBtu in early September as storage refilled at a very rapid pace. However, while one can draw similarities between these two years because of storage inventories, the overall pricing environment is very different.
Natural Gas Price Outlook provides you with the tools needed to implement a cost-effective natural gas strategy for 2012 and beyond. This 59-page, comprehensive analysis evaluates numerous price drivers and is a must-read for those who want answers to what the future holds for natural gas prices. To learn more and secure your copy, visit http://www.naturalgasoutlook.com.
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About Energy Solutions, Inc.
Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 50 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.