What Makes Natural Gas Prices Fluctuate?

Submitted byConsumers Gas … onTue, 08/22/2017 - 9:00am

The ratio of supply and demand affects the price of nearly every good and service in the market today. If something is in short supply but high demand, the price usually goes up. If the opposite is the true and something has a low demand but high supply, the price will typically go down. And in some cases, the actual price of a good or service can work to regulate the forces of supply and demand to keep the cost more stable. Natural gas is no exception. According to the U.S Energy Information Administration, there are certain influencing factors that are unique to natural gas: “Factors on the supply-side that affect prices include natural gas production, net imports, and underground storage levels...Factors on the demand-side include weather (temperatures), economic conditions, and petroleum prices. Cold weather (low temperatures) increases demand for heating, while hot weather (high temperatures) increases demand for cooling, which increases natural gas demand by electric power plants.” On a larger scale, manufacturing need for natural gas with fluctuate based on larger economic conditions. We are motivated by the needs of our more than 7500 members in rural communities throughout Ohio to be as efficient as possible based on current natural gas rates.

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