Monday, August 31, 2009

Spot Price: How Low Can You Go?

The Henry Hub natural gas spot price continued its freefall today, dropping ten cents, or 4%, to $2.40.  It is nearly 11% off last Monday's price and 71% off the price this time last year. 

The NYMEX futures prices keep dropping too.  The October contract, which was in the $3.18 range at the end of last week, dropped to $2.97.  The December 2009 contract, which was holding on to $5 last week, closed at $4.83.

I don't expect to see any meaningful upward bumps in price until the storage injection season is over. Unless, of course, there is some good legislative news coming from Congress, but that will just be a news bump and not an increase based on industry fundamentals.

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