Natural Gas Markets in 2006 [Updated December 12, 2006]   [open pdf - 106KB]

From the Summary: "The Energy Information Administration (EIA) in its Short Term Energy and Winter Fuels Outlook (STEWFO) provided good news for residential natural gas consumers. EIA projected that natural gas winter home heating costs might decline by as much as 13% from last year's record-setting levels, even though consumption is expected to increase this winter. The STEWFO sees prices for natural gas lower than last year as a result of weak market fundamentals. Analyses of natural gas market demand and supply conditions seem to be consistent with the EIA STEWFO. The price of natural gas is actually many prices. Small, residential, consumers typically pay the highest prices per unit of natural gas, and large industrial and electric power consumers pay the lowest prices per unit. Taken in this context, the 2006 price outlook may be less favorable than the EIA suggests, across different sectors. Risk factors, including weather conditions, movements in the price of crude oil, and developments in the futures markets all could affect the market balance in the natural gas market. Because these factors have caused price volatility in the past, the EIA outlook may best be considered as conditional on outcomes in these areas."

Report Number:
CRS Report for Congress, RL33714
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