US natural gas prices have plunged to a near-three-decade low as what is set to be the country’s warmest winter on record slashes demand for the heating fuel just as production surges to record levels.
Winter months, when heating demand is highest, are on track this year to be the mildest since reliable records began in 1950, analysts said, leaving gas usage much lower than expected.
Coupled with surging US gas production — which hit a record 105bn cubic feet a day in December — that has sent prices into freefall, plummeting by more than 50 per cent since mid-January.
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Difficult to tease out how this affects renewables in the short term, but it underlines the challenges fossil gas has with volatile prices, and shows how US consumers dependent on gas are strapped to a global pricing roller coaster.
One downside of low natgas prices, of course, is that the lower the margins are on the product, the higher the pressure to take shortcuts, including how much effort is spent monitoring and correcting leaks.