Economy
December 22, 2013
Natural Gas Prices Rise on Tight Supply
Written by Sandy Williams
Natural gas future prices rose 5 percent on news from the Energy Information Administration that gas supplies fell by 285 billion cubic feet in the week ended Dec. 13. Freezing temperatures around the nation drove demand for natural gas to heat homes and businesses, creating the largest draw on gas supply in a single week, according to the EIA. Natural gas supply is currently 7.5 percent below the five year average. A rise in natural gas prices could help the steel industry which has seen a decline in new rigs since 2011.
Frigid temperatures in the Midwest and elsewhere also slowed gas production, reducing supply further, as producers experienced “freeze-offs” where water in the wells freezes disrupting gas flow.
