The heat wave causing the East Coast to swelter and crank up the air conditioning has eased a bit, and Chris has been downgraded from a tropical storm to a depression that no longer threatens Gulf of Mexico production. Those two factors have helped to reduce the price of natural gas at New York City Gate by nearly 20% in just two days.
As of the close of trading yesterday, here are the prices at some key locations:
|NYMEX Henry Hub Future||$7.25 per million BTU|
|NYMEX Henry Hub Spot||$7.44 per million BTU|
|New York City Gate Spot||$8.34 per million BTU|
Source – Bloomberg. Com Energy Prices 4 August 2006
As mentioned before, natural gas prices at particular trading hubs can be quite volatile, increasing and decreasing rapidly. Utilities generally are able to shield their customers from such wide variations and seek to provide more stable pricing.