WASHINGTON — If the price of a gallon of gasoline has distracted you a bit from thinking about the cost of natural gas, that’s understandable. However, the government just released its short-term energy outlook and the news isn’t good.
Two months ago, the Energy Information Administration (EIA), the government’s energy statistical arm, was forecasting a 16.5% hike in the price of natural gas from last year. Last month, the projection indicated a 35% bump from last year. Natural gas, according to the just-released EIA outlook, will cost a whopping 52% more this year than last year.
While this is just a projection, laundry managers certainly can’t be happy. Other factors, such as a volatile hurricane season, could alter the projections even more.
What’s causing this stunning projection? High oil prices, low imports of liquid natural gas, growing consumption and a year-over-year decline in inventories are all contributing factors, the government reports.
The Henry Hub natural gas spot price averaged $7.17 per thousand cubic feet (Mcf) in 2007 and is now expected to average a bit more than $11 per Mcf in both 2008 and 2009.
Is there any good news around the corner? The next EIA report is due out July 8. Based on the past several reports, one shouldn’t get his/her hopes up too high. All of the conditions listed above are expected to continue and keep natural gas prices high, the EIA reports.
Have a question or comment? E-mail our editor Matt Poe at [email protected].