Consumers Paying More As Nat Gas Cash Prices Spike

Tyler Durden's picture


Submitted by Joao Peixe via,

As natural gas prices climb, reaching over $5/mcf again on 4 February, and with an unseasonably cold winter, local utilities say that natural gas customers’ bills are 30-40% higher now than last winter.

Last week, we saw natural gas prices rise above $5 for the first time in three years, then falling back a bit only to rise again on 4 February, with March futures trading above $5.25/mcf—or more than 6%, according to expert trader Dan Dicker.

Customers are footing the bill for higher gas prices and the coldest November-January period in four years in the Midwest and Northeast.

In Omaha, Nebraska, weather has been about 30% colder this year than last, and utility regulatory officials saying that gas use among customers is up while bills are up by 34-38% over last year.

Utilities are paying high prices for gas because demand has been higher and consumption rates at a level that has reduced storage by about 17% over the average of the previous five years.  

In the meantime, there is a great deal of disconnect between cash prices and futures prices for natural gas, with futures trading an increasingly volatile business. While 6 February saw a spike in next-day prices, according to Reuters, 5 February saw natural gas futures fall sharply due to longer-term mild weather forecasts.  

“The futures market appears to be disconnected from key developments occurring in the physical market,” Reuters quoted BNP Paribas analyst Teri Viswanath as saying on 6 February. “Today we witnessed a marked increase in spot prices for every consuming region, suggesting that utilities might be rationing limited inventories by purchasing gas off the market.”

As Dicker noted for The Street, “Low stockpiles caused by sequestration and a rush of domestic exploration and production companies away from natural gas production in favor of shale oil is taking its toll and providing the first real and consistent support of prices since 2007. Suddenly, natural gas markets are vulnerable to price spikes and traders are afraid to be short.”

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Fri, 02/07/2014 - 15:34 | 4412812 slotmouth
slotmouth's picture

But NPR said my bill wouldn't be affected?

Fri, 02/07/2014 - 15:35 | 4412822 Headbanger
Headbanger's picture

NPR is brain dead.

Fri, 02/07/2014 - 15:44 | 4412842 pods
pods's picture

My gas prices have been flat for like 2 years. Just started seeing price spikes.  I felt like they were giving it away before.


Fri, 02/07/2014 - 15:56 | 4412875 HyBrasilian
HyBrasilian's picture

I switched to C3H8  many years ago [for stove cooking] & have it stored in 100 lb, 200 lb, & 40 lb tanks off site... Don't need natty to heat the house [& instead use wood pellets ~ which ~ work in certain instances based on your configuration]


The problem with most people is that they're, in a way of saying, 'ALL OR NOTHING'... Usually ~ it's inefficient to be that way... You have to identify your various energy needs, seasonality, & other things, & diversify...



PODS ~ You're in FLA right?... If so, is that 'Constellation'?

Fri, 02/07/2014 - 16:26 | 4412991 NoDebt
NoDebt's picture

My brother swears by his wood pellet stove.  He was burning wood in his wood stove the last couple years but finally used it all up from the trees he had removed from his back yard.  So he converted over to wood pellets and loves 'em.

I ask him how much he saves vs. not using it and then he starts using a lot of 4 letter words to describe the bills when he's out of town a couple weeks and his wife runs the heater full time.  

Fri, 02/07/2014 - 17:00 | 4413081 Fedaykinx
Fedaykinx's picture

pelletized wood pulp is an emerging market down here where i live, finally something to help out depressed bulk fiber prices. it'll help create some needed jerbs.

Fri, 02/07/2014 - 17:32 | 4413207 0b1knob
0b1knob's picture

Not my problem not my fault and I don't care.   In fact since I own some natural gas stocks I'm enjoying the increased diviends and capital gains.

I don't care if the muppets freeze to death in the dark and civilization ends as long as I get my cut.

Fri, 02/07/2014 - 19:04 | 4413573 Boris Alatovkrap
Boris Alatovkrap's picture

Follow success in Copper ore extraction, Boris is explore Natural Gas. Preliminary research is show large natural gas deposit nearby, and is coincidence, in close proximity of Kaliningrad pipeline. Boris is only need acquisition of harden metal bit and industrial drill.

Fri, 02/07/2014 - 19:06 | 4413589 BeagleOne
BeagleOne's picture


Fri, 02/07/2014 - 16:43 | 4413032 pods
pods's picture

Little further up 95 in NC.

Put in a supplementary propane stove after the ice storm of '02.  I like the warmth of the fireplace. Heat pump just isn't warming in the winter.

Wood stove would be my favorite, but won't suit me at the moment.


Fri, 02/07/2014 - 17:20 | 4413149 HyBrasilian
HyBrasilian's picture



Yeah, I hear ya...

That's basically the way it goes... It's almost useless trying to discuss the subject on an open forum because the BEST solution [for the individual], is ultimately dependent on:

- their individual 'SPACE' configurations

- the price & availability of various fuels in their local market

- their STORAGE [including 'safety'] needs of such fuels

- etc.


One can only really experiment [for themselves] what works for them...

Fri, 02/07/2014 - 15:44 | 4412837 whatsinaname
whatsinaname's picture

This oughta be good for the coal mining companies too. Many in the dump now the get rid if coal mantra wont work atelast this winter.

Fri, 02/07/2014 - 15:49 | 4412845 PersonalRespons...
PersonalResponsibility's picture

OT: Blythe Masters

The master is not too worried about anything... 

blithe adjective    
  1. 1. showing a casual and cheerful indifference considered to be callous or improper. "a blithe disregard for the rules of the road" synonyms: casualindifferentunconcernedunworrieduntroubleduncaring,carelessheedlessthoughtlessMore

It's almost as if the name is made-up.

Fri, 02/07/2014 - 16:10 | 4412918 misterkel
misterkel's picture

Read Gold Wars: Battle for the Global Economy from Clarity Press.

Fri, 02/07/2014 - 15:36 | 4412813 HyBrasilian
HyBrasilian's picture

Unfortunately ~ the 'free shit' army can't keep their keisters warm [unless they sit on their Obamafones]...


Look on the bright side... Go *LONG* 55 gallon steel drums & 2x4 scraps pulled off rotting building frames...

Fri, 02/07/2014 - 15:50 | 4412861 Fidel Sarcastro
Fidel Sarcastro's picture

We are NOT paying more...the Fed said so.

Fri, 02/07/2014 - 15:36 | 4412816 Fish Gone Bad
Fish Gone Bad's picture

That global warming thing is working out well.  Not.

Fri, 02/07/2014 - 15:35 | 4412821 LibertyBear
LibertyBear's picture

Bear do not need natural gas. Bear has natural energy, hibernation and ZP energy generator.

Fri, 02/07/2014 - 15:39 | 4412823 Rainman
Rainman's picture

Now they can ditch the death panel idea .... Granny gonna be icicled in 62 degrees.

Fri, 02/07/2014 - 15:39 | 4412827 ATM
ATM's picture

Where all that Marcellus Shale gas?

Fri, 02/07/2014 - 16:51 | 4413053 pods
pods's picture

Still under my parents property.  NY will okay drilling about a year after everything collapses and we are all in assless chaps and power our "barter" towns on pig shit.

My thoughts on large scale drilling in the US is that they do not want to allow that otherwise all this funny $$ being printed stays here and we all wear bread helmets along with our assless chaps when the inflation roars along.

OT:  I seem to have a fixation with assless chaps?  Note to self, do not see shrink. Some things are better left unknown.


Fri, 02/07/2014 - 16:53 | 4413057 Fedaykinx
Fedaykinx's picture

NY will never allow fracking, there's too many neoluddite chicken littles up there.  kinda like ZH, now that i think about it.

Sat, 02/08/2014 - 01:19 | 4414510 Flakmeister
Flakmeister's picture

Shitting in your own crib is fine when it is 20 country yokels in the middle of nowhere, doing it in the watershed for 20 million people is another story....

Sat, 02/08/2014 - 16:26 | 4415542 Ident 7777 economy
Ident 7777 economy's picture


"Neoluddite chicken little" NIMBY.


Fri, 02/07/2014 - 16:59 | 4413075 Citxmech
Citxmech's picture

It's OK.  Embrace your inner Wez.

Fri, 02/07/2014 - 15:40 | 4412829 firstdivision
firstdivision's picture

Not to worry.  Once consumers bills go up, FERC/DC steps in and crushes the evil speculators. 

Fri, 02/07/2014 - 15:40 | 4412834 blindman
blindman's picture

financial markets are the trojan horse
that never stops kicking you in the balls.

Fri, 02/07/2014 - 15:49 | 4412856 ejmoosa
ejmoosa's picture

We'll seasonally adjust that noise out of the equation...


Fri, 02/07/2014 - 16:13 | 4412933 ejmoosa
ejmoosa's picture

There's no inflation for me with natural gas this year, to be honest.  I locked in at .486 for a year.  

But just a nickel increase next year and my natural gas prices will have risen by 10%.  I am expecting it to be much more than that, however.

Fri, 02/07/2014 - 15:50 | 4412864 Galts Disciple
Galts Disciple's picture

There's no inflation, no. I'm paying more to heat my house, more to fill my car, and more at the grocery store. Oh and have you priced a new car lately? And don't forget all the inflation that has found its way into the stock markets. But other than that everything is great. I am so sick of being lied to everyday. I wish the collapse would just hurry up and happen so we can flush all the crap. 2008 should have done it but the criminals running the world couldn't leave things alone, they had to jump in and be the saviors. Well just because you saved a turd from being flushed down the toilet that does not make you Jesus Christ.

Fri, 02/07/2014 - 15:56 | 4412878 roadhazard
roadhazard's picture

I thought America was awash in Nat Gas. Time to gouge the consumer, again.

Fri, 02/07/2014 - 16:14 | 4412942 Volkodav
Volkodav's picture

Da MSM told you you know it true in real...

Fri, 02/07/2014 - 16:51 | 4413055 Fedaykinx
Fedaykinx's picture

yeah it was $13 per mcf not 4 years ago.

Fri, 02/07/2014 - 21:39 | 4414079 adr
adr's picture

And my father in law set the house at 55° because any more than that would have run him $350+ to heat his home a month. 

Sat, 02/08/2014 - 01:21 | 4414512 Flakmeister
Flakmeister's picture

As I have pointed out for almost 4 years here...

The US is still a net importer of natural gas....

Sat, 02/08/2014 - 16:28 | 4415547 Ident 7777 economy
Ident 7777 economy's picture

... artful use of non-disclosure; why don't you specify from which countries we import? 

Sat, 02/08/2014 - 18:17 | 4415773 cdmoore125
cdmoore125's picture

Distrigas in Boston imports natural gas, much from Atlantic LNG. They source a lot from Trinidad & Yemen. The U.S. does not export natural gas to any country but Mexico, and won't until late 2015 at the earliest.

Sat, 02/08/2014 - 19:09 | 4415900 Ident 7777 economy
Ident 7777 economy's picture

Flux said we are 'net importers'; my question still is: from whom?

Sat, 02/08/2014 - 19:15 | 4415910 Flakmeister
Flakmeister's picture

Why don't you look it up...

Google EIA US Natural Gas imports by country

Fri, 02/07/2014 - 16:01 | 4412891 DavrosoftheDaleks
DavrosoftheDaleks's picture

30% colder in Omaha is proof even mother nature doesn't like Buffett.

Fri, 02/07/2014 - 19:08 | 4413601 BeagleOne
BeagleOne's picture

Finally, someone finally spells his name correctly...(snark)

Fri, 02/07/2014 - 16:02 | 4412895 uncle_vito
uncle_vito's picture

Used 2750 gallons of propane in my wind machines to keep my orange groves from freezing last month in Calif.   Only had to pay $2.33 per gallon.   Guess I got lucky or the vendors know not to gouge the customer.   That way the vendor keeps the customer year after year.

Fri, 02/07/2014 - 16:11 | 4412932 Volkodav
Volkodav's picture

How much is propane price higher?  From last year or recent low?

Fri, 02/07/2014 - 16:31 | 4412992 LMAOLORI
LMAOLORI's picture


The highest I ever, ever paid (WI) when we had propane was $2.29 so we got rid of it that was 2 years ago. But it really depends on your specific location for how much it has increased. My little brother lives in N. Dakota and prices there have tripled in the last few months.

Fri, 02/07/2014 - 16:05 | 4412907 Rock On Roger
Rock On Roger's picture

This NG action this week showws what happens when the beach ball gets held under water for too long.

The first manipulated commodity to break free?

Burn gaz bitchez.

Stack On

Fri, 02/07/2014 - 16:58 | 4413074 Fedaykinx
Fedaykinx's picture

i wouldn't start celebrating yet, it's under $5 and we're headed into the shoulder season.  add to that when you start getting above $4.50 lots and lots of shut in production starts getting opened up.  once the weather warms we'll see, i guess.  hope for a hot summer.  /shrug

Sat, 02/08/2014 - 18:21 | 4415781 cdmoore125
cdmoore125's picture

Right on. The forward curves haven't moved at all (Cal '15, '16+) as producers with shut-in production sell into any future strength.

Fri, 02/07/2014 - 16:06 | 4412911 denverdolomte
denverdolomte's picture

Wow, I feel so lucky. Here in Colorado we have Xcel Energy as the only real provider of gas/electric. I love that I am using less energy compared to last year. Last year January bill was $230 compared to $386 this January. I though it was only natural for the price increase, especially with no other options for energy. 

Fri, 02/07/2014 - 16:13 | 4412940 Rukeysers Ghost
Rukeysers Ghost's picture

Higher energy usage for the consumer because more people are sitting at home now, out of work enjoying thier new found freedom. Thank you Obamacare.

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