The much-discussed polar vortex was part of an unusually cold first quarter of 2014 that helped increase spot natural gas prices for the year, according to a recent analysis from the Energy Information Administration (EIA).
Average wholesale, or spot, prices for natural gas increased by 20% or more at most trading locations in the United States in 2014 compared to 2013, EIA reported Jan. 13.
“The average price of natural gas at Henry Hub in Erath, Louisiana, the primary benchmark location for natural gas pricing in the United States, rose 17% to $4.37 per million British thermal units (MMBtu) from the 2013 average price of $3.73/MMBtu,” EIA reported.
“In calculating the annual average, those early high prices overwhelmed current prices that are in the $3/MMBtu range,” EIA added.
The colder-than-normal temperatures in January through March of 2014 drove up demand for natural gas in both the residential and commercial markets, EIA said. The increased demand also resulted in record-breaking natural gas storage withdrawals early in the year.
The week ending Jan. 10, 2014, just over a year ago, posted a record-high net withdrawal of 287 billion cubic feet (Bcf) from underground, natural gas storage facilities. That particular withdrawal was the largest for the 20 years for which data exist, EIA has said.
Things got better in the summer of 2014, however.
Mild summer temperatures reduced the need for air conditioning, and in turn limited the consumption of natural gas by the electric power sector. The reduced demand and continued production gains enabled record natural gas storage injections from April through mid-November. During this period, natural gas prices fell nationwide, EIA said.
On Jan. 8 EIA released a report indicating that Eastern spot steam coal prices declined in 2014 compared to 2013 because of a decline in steam coal expects.
The full EIA 2014 gas report can be found at http://www.eia.gov/todayinenergy/detail.cfm?id=19551.