mY FAVORITE line from the news article is the part that has "average price.......gulf points" in it. Gotta be honest though, these price changes are scary. They seem like mis prints.
Energy News
02/25 16:07
U.S. Henry Hub Gas Jumps 49 Percent to $19 on Shortage Concerns
By Bill Murray
Houston, Feb. 25 (Bloomberg) -- U.S. Gulf Coast natural-gas prices at the Henry Hub in Louisiana rose to a record amid cold temperatures and fears of a gas shortage.
Cash prices at the benchmark hub rose $6.38 to $19.38 per million British thermal units as options for March gas expire, forcing buyers onto the physical markets to fulfill their financial obligations.
``It's obviously panic buying driving this thing and there are some guys hung right now and nobody seems to want to sell it,'' said Brad Florer, a trader for APB Energy in Louisville. ``There aren't any rules at this level. There are no limits to slow it down so it's wide open.''
The current Henry Hub price is the highest in 11 years of Bloomberg record-keeping. Prices closed on Friday at $6.90 per million Btu. The March contract, which expires tomorrow, reached $11.899 in electronic trading before dropping down to $9.600 at 1:36 p.m. on the New York Mercantile Exchange.
The previous record for the most-active contract was $10.10 per million Btu for Dec. 27, 2000; the highest close was on the same day at $9.978.
Several pipeline companies, including Dominion Transmission Co. and El Paso Corp., are restricting the amount of gas customers can take off their systems through interruptible contracts. Such contracts are cheaper for buyers and easier to cancel by sellers than firm contracts. The gas can then be resold to a higher bidder.
``They're going to interruption as much as possible in order to resell it at a higher price,'' said Carl Neill, an analyst with Risk Management Inc. in Chicago. ``Why not cancel it and resell it to the highest bidder? You're going to make a fortune selling it.''
The average price at 15 delivery points on the Gulf Coast rose $6.64 to $19.17, also a record high according to Bloomberg data.
Temperatures in Chicago and New York are expected to be about 8 degrees below normal through the middle of next week. The latest cold wave comes at the end of two months of below-normal temperatures in much of the |
