Fears of an Energy Crisis Begin to Dim
Consumption Cuts Help Lower Prices for Gasoline, Natural Gas and Electricity
By Peter Behr
Washington Post Staff Writer
Friday, June 8, 2001; Page E01
washingtonpost.com
The Energy Department predicted yesterday that gasoline prices will drop nearly a dime a gallon at the pump, from the current average of $1.71 a gallon -- far below the excited warnings several months ago that a $3-per-gallon price was possible.
Natural gas prices, which soared last winter to more than $10 for 1,000 cubic feet, doubling heating bills for many consumers in northern states, fell to $3.56 in early June. That's nearly a 25 percent decline from the beginning of May, according to a spot market survey by Platts, a division of McGraw-Hill Cos.
Hourly spot market prices have dropped to around $75 for one megawatt of power in California, the first time statewide prices have been below $100 since the state's energy crisis began late last summer, Platts reported. In April the California Department of Water Resources, which had to take over power purchases from the state's insolvent utilities, paid an average of $284 per megawatt hour
The drop in natural gas prices follows cutbacks in gas use by manufacturers, primarily of aluminum, fertilizer and chemicals. Gas demand will tighten if most of this production is resumed this summer and fall. |
