Natural Gas Price Forecast
The U.S. Energy Information Administration has issued it’s short term energy forecast. Here is the chart for natural gas:
The dotted lines are 95% confidence limits on the forecast. So while there is a good chance natural gas prices will remain at the $2 per Million BTU level, there is also a good chance prices will double in 2016 or even close to triple. On average, though, natural gas prices are forecast to rise slightly through 2016 to around $3 per Million BTU after dropping throughout 2015. These numbers are based largely on the commodity futures markets.
Residential gas prices have a large seasonal variability, as can be seen in this graph.
The residential price is significantly higher than the spot price due to the additional costs of delivery and doing business. The spot price is not a big driver of retail gas prices but prices are forecast to increase throughout 2016. — John Rako