Natural Gas Prices Stabilize, Near Historic Lows
In March of last year, natural gas prices bottomed out after steadily declining from their Polar Vortex peak in January 2014. Following gas prices, competitive electricity prices also declined to a three-year low in March 2016 and again in November 2016. Since then, both gas and electricity prices have risen sharply, finally leveling off in January of this year.
The excessive gas surplus that produced low price points in March and November of last year has finally been stripped away by sluggish natural gas production throughout 2016. Lower supply levels tend to pressure gas (and subsequently electricity) prices upward. In the short-term, however, an exceptionally mild winter and low heating demand has driven the March 2017 NYMEX natural gas contract down 11% over the past two weeks and 23% since late December.