At what daily temperature do customers turn on their furnaces? Or more realistically, given individual behavior, over what range of temperatures do they turn on their furnaces? To estimate the...
Clear Skies for Gas
Unconventional sources brighten the U.S. supply outlook.
Exchange (NYMEX) natural gas futures ranging from somewhat less than $8.00/million Btu to about $8.20/million Btu in the second half of August 2008. This decline is in spite of relatively low seasonal storage levels at that time. 7 More surprisingly, natural gas futures dropped to about $7.30/million Btu on Sept. 2, 2008, after assessments showed that Hurricane Gustav caused relatively minor damage to Gulf of Mexico oil and gas production platforms and coastal refineries, which are the major source of U.S. liquid fuels and natural gas supplies. This was accompanied by a drop in NYMEX crude oil futures to about $107/barrel for West Texas Intermediate and $106/barrel for North Sea Brent. By Sept. 9, 2008, NYMEX crude oil futures had decreased further to about $105/barrel and North Sea Brent futures to about $102/barrel, in spite of the projected pathway of Hurricane Ike into the Gulf of Mexico, and natural gas futures held at $7.30/million Btu. Since then, oil prices dropped to as low as $92/barrel even after the damage caused by Hurricane Ike to Gulf of Mexico production and refining facilities, and then rose again to above $100/barrel, but natural gas futures through early October 2008 remained below $7.50/million Btu. During the turbulent days for the U.S. and global equity markets from October 1 to October 9, oil prices dropped temporarily to below $90/barrel, while natural gas NYMEX futures fell to somewhat less than $7.00/million Btu. In fact, on the morning of Oct. 9, 2008, NYMEX West Texas intermediate futures dropped to about $89/barrel and North Sea Brent futures to $85/barrel, while natural gas futures declined to $6.85/million Btu. Then, following the meltdown of the Dow Jones Industrial Average by 733 points on Oct. 15, 2008, NYMEX West Texas intermediate futures dropped to $72/barrel and North Sea Brent futures to $69/barrel, while natural gas futures dropped to $6.50/million Btu. These oil-price fluctuations with minimal corresponding changes of natural gas prices in the $6.50-$7.00/million Btu range were likely to continue for the foreseeable future prior to the election of Illinois Senator Barack Obama to be the 44th President of the United States on Nov. 4, 2008. This earlier view was confirmed by the drop in the futures of the two benchmark crudes to $71/barrel and $69/barrel on Oct. 21, 2008, in the midst of continuing turmoil in the U.S. equity markets, while natural gas futures held at $6.75/million Btu. On Oct. 23, 2008, the two benchmark crudes futures dropped further to $68/barrel and $66/barrel, while natural gas futures dropped to $6.55/million Btu. Then on Oct. 28, 2008, the benchmark crudes dropped again to $65/barrel and $63/barrel and natural gas futures to their lowest level in recent years—approximately $6.20/million Btu. There was, however, a recovery in the benchmark crude oil futures to $68 and $65/barrel, respectively, on Oct. 30, 2008, but natural gas futures held at $6.90/million Btu. Since then, President-elect Barack Obama has outlined his plans for U.S. energy policy, which include a hold on new nuclear capacity until there is proof of the safety of nuclear waste disposal in the repository at