Tuesday, November 15, 2011

Going Down, Down, Down

The Henry Hub spot price for natural gas has taken a tumble in recent months and especially in the past few days.  While the price has sucked wind for the past three years and has been lower than the current level during that time, the price has dropped 11.6% since last Wednesday.  It closed at $3.13/MMBtu this afternoon.

Low commodity prices are common this time of year while the market waits for storage levels to be drawn down instead of increased.  I'm sure the price drop has everything to do with the upcoming storage report, which probably will record a new record high, and the relatively mild weather across the country, which is not likely to be a big draw on storage levels, but it is still nauseating to watch.  The current price actually makes $4/MMBtu actually look attractive, and that's pretty hard to do.

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