One of Toledo’s coldest Januarys on record means natural gas prices will be substantially higher in February.
According to Columbia Gas of Ohio Inc., the price of natural gas for February will be 68 cents per hundred cubic feet.
That’s 20 cents higher than last February’s rate. As a result, the average gas bill for February is expected to be $50 higher than last year, the utility said.
The average bill this month is pegged at $155.87, Columbia Gas said. A year ago it was $105.36. The new February rate of 68 cents is based on a closing price on the New York Mercantile Exchange (Nymex) of 55½ cents plus a processing fee of 13 cents.
Angelina LaRose, a natural gas analyst with the federal Energy Information Administration, said that while total gas supplies aren’t in jeopardy, higher prices are occurring partly because of speculation about what the weather will be in February.
“Even with what we’re seeing in the spot market, production [of natural gas] has been trending up month over month, year over year,” she said.
“But in times of a cold snap, and there’s a lot of increase in residential and commercial consumption, prices can be over $5 [per 1 million British thermal units, or MMBtu]. Part of that increase in the Nymex prices can be attributed to what people are thinking the weather forecast will be this month,” Ms. LaRose said.
For the seven days ending Wednesday, Nymex prices reached $5.56 per MMBtu, a price level not seen since 2010.
The story is similar with Natural Gas Liquids products like propane. Propane prices rose 12.6 percent last week.
Cold weather in January means there was a heavy drawdown of the natural gas sitting in the nation’s underground storage sites.
Natural gas in storage decreased to 2,193 billion cubic feet as of Jan. 24, leaving total inventories at 22.5 percent less than last year, and 16.6 percent below the five-year average.
Mike Anderson, director of supply development at Columbia Gas, said that despite the heavy usage and rising prices, supplies remain plentiful enough to get customers through the winter.
“I think we’re in good shape. We’ve had some cold weather, but our supplies are in good shape overall,” Mr. Anderson said.
Contact Jon Chavez at: email@example.com or 419-724-6128.