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EIA Natural Gas Report

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  • EIA Natural Gas Report

    Natural gas in storage rose 3 billion cubic feet in the March 20 week to 1,654 bcf.

    Prices are down nicely on the news.
    Attached Files

  • #2
    Re: EIA Natural Gas Report

    The last time NG was in the $5.50 per mmcf, pump prices were lower than they were this time around. Now I've seen spot prices more than a dollar lower than that, along with increased storage a 5 year highs due to warmer weather in the West. I haven't been able to correlate spot prices with pump prices. There seems to be a disconnect between the two from historical trends: confused:
    Last edited by Curtis; 03-26-2009, 12:10 PM.

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    • #3
      Re: EIA Natural Gas Report

      The disconnect is not just between cng and wholesale, but a large disconnect between the wholesale (henry hub 3.80/mcf) and retail (pipelines still charging over 10.00/mcf for gca). I have wrote to my public service commission for an explanation. They replied that it will take more time for the prices to equalize. Very frustrating during a recession, that what appears to be games with pricing may still be going on.

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      • #4
        Re: EIA Natural Gas Report

        The utility company that retails the gas is entitled to charge whatever they wish for the gas. If you want to pay Henry Hub, then apply to Dominion, or whatever your industrial pipeline company is nearby, get a tap for $50,000.00, install your own fueling equipment for $100,000.00, and presto! Gas for .57 cents/gge.

        Frankly, there are non-negotiable costs above and beyond just the feedstock, in this case, methane. Also, the cng is purchased from a municipality, which can charge as much as $15.00 a deca-therm. Beyond that are taxes, overhead, electricity, interest on the note, depreciation, etc. CNG could be free to the station owner, yet he may still be forced to chare $2.00/gge just to make a profit.

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        • #5
          Re: EIA Natural Gas Report

          The purpose of the original post was to show a disconnect, which I was glad that others noticed as well, between the spot price and the price at the pump. As a market technician I follow these relationships all day long. But something is off here. Gasoline follows crude very closely. One would assume you could do the same with Nat Gas. Here in UT it doesn't really matter, our price is highly regulated. These low spot prices will work into future rate calculations for Questar to submit to the PSC. But other areas of the country, that are supposed to be based on market prices, don't really seem to be getting any benefit from the next to nothing prices of the commodity right now. I find that interesting and a potential hindrance to the alt fuel movement.

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