Natural Gas Prices Starting to Rally
The price of natural gas is up today by 5.32%, which is a $0.12 change to $2.31, the highest the prices have been in months.
That is excellent news for an industry that has been struggling with sales lately. The gas industry has suffered from oversupply and low demand as the weather warms up and there is little need for companies and countries to have extra natural gas on hand.
The oversupply problem is partly due to calm weather that allowed for gas reserves to build up, with only minor issues on the production side. The occasional gas production facility issue aside, the industry has managed to collect gas smoothly for the most part this year, which has resulted in some of the lowest gas prices in years.
February’s price of $1.60 is as low as the price point has dropped since back in 2020, but now, the price is rallying. The current price is right on par with where the industry was in late January of this year, and it may signal a turning point for the natural gas sector.
Natural gas rates are up about 45% from where they were at the end of March, from which point they have been steadily and steeply increasing.
Will Prices Keep Rising?
Industry analysts say that there is little expectation that the prices will go much further than they are right now, when looking at the next few months. The prices may shoot up in late fall, as the weather cools, but oversupply issues will likely still drive prices down.
Another factor at play that will prevent rising prices is the abundance of energy alternatives. Wind and solar options are growing more common, and their ease of access is making natural gas less necessary. The expectation is that this issue will continue to hamper gas prices and that the current rally may not last long.
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