Everyone has been following the price of gasoline recently, but folks who plan to keep warm this winter with natural gas should be concerned about trends in that commodity as well.
Natural gas prices are at record levels for August. Considering that the summer months typically have the lowest gas prices, the cost come winter may be even higher.
“We really don’t know the price yet,” said Commerce City Manager Clarence Bryant. “The winter meetings (of the Municipal Gas Authority of Georgia, from which Commerce buys its gas) are next month, late September or early October.”
The city sells natural gas to 2,750 residential and commercial customers.
Commerce’s cost per unit is based on the market price on the first day of the month.
“This month, as we sit here, residential gas is $18.79 a unit. Commercial is $19.04,” Bryant noted.
A year ago, the city was selling August gas for $8.62. Last January, in the peak of the winter season, the city sold natural gas for $10.72.
It costs Commerce about $15.54 to get a unit of 1,000 cubic feet of gas (mcf) delivered to the city this month. The city adds on $3.25 per unit for residential customers and $3.50 for commercial accounts.
Typically, natural gas prices peak in January and February, but this year prices continued to climb into August. Bryant notes, however, that in recent days the price has fallen somewhat — just like the cost of gasoline.
A couple of factors appear to be influencing natural gas prices. One is the fact that so many gas-fueled electric generating plants have come online, increasing the demand for natural gas. The other is a worldwide demand for energy that has caused prices to soar on every fuel from gasoline to fuel oil.
According to Bryant, it is reasonable to expect natural gas prices to track crude oil prices.
A lot of other factors can affect the price of natural gas, including speculation, threats of hurricanes in the Gulf of Mexico interrupting production and the severity of winter weather, particularly in the Northeast.