WASHINGTON, D.C., Jan. 7, 2002 – Average U.S. monthly natural gas spot prices for January rose 12.6 % from December, to $2.51/MMBtu – yet are 74.6% below the $9.88/MMBtu average reached in January 2001, according to new data released today.
In a Platts survey by Inside FERC’s Gas Market Report, whose spot price surveys set the benchmark prices for most monthly spot contracts in North America, the average price of natural gas delivered to the premium New York and New Jersey markets for January was $4.92/MMBtu compared with $3.12/MMBtu in December and $19.33/MMBtu in January 2001, last year’s peak.
In Southern California, where the monthly average reached a high of $16.39/MMBtu in January 2001, the average monthly spot price for January 2002 climbed to $2.62/MMBtu, up 15.4% from $2.27/MMBtu in December. The January average is 84% below the January 2001 level.
“Monthly spot prices for January climbed higher because weather was cold across most of the nation at the close of December when most of the January dealmaking was happening and because forecasts for the first part of January were for more of the same,” said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC’s Gas Market Report. “Many buyers were willing to pay a little more for monthly gas – even though storage inventories are at record-high levels – because they didn’t want to risk having to buy their gas in the daily market, which can be particularly expensive in January. Several days of having to buy $15.00/MMBtu gas would make the $2.51/MMBtu gas for the month look like a bargain.”
On Jan. 4, the average price for gas futures contracts for the coming 12 months – an indication of the marketplace’s price expectations – was $2.569/MMBtu, down 9.25% from the $2.831/MMBtu average on Dec. 4 and 50.9% from the $5.241/MMBtu average on April 4, 2001.
These and other Platts energy prices can be charted at no cost at www.platts.com.