Natural Gas Prices Nearly Quadruple Nationwide Since January 2000, According to Platts

Prices in New York and New Jersey Hit $19.33/MMBtu, Highest in the Nation

WASHINGTON--(BUSINESS WIRE)--Jan. 4, 2001--Average monthly spot prices for natural gas nearly quadrupled nationwide since January 2000, according to data published by Platts, the energy market information division of The McGraw-Hill Companies (NYSE: MHP - news). In an exclusive survey released today by Inside FERC's Gas Market Report, whose spot price surveys set the benchmark prices for most monthly spot contracts in North America, supply-area prices rose to $9.88/MMBtu nationwide in January 2001, nearly four times greater than the previous five-year average of $2.54 recorded just a year ago.

The average price of natural gas delivered to New York and New Jersey markets for January 2001 rose to $19.33/MMBtu, some $15.32 over the January 2000 average of $4.01. In Southern California, where tight supplies and strong demand for gas by power generators sent prices rocketing to $14.26/MMBtu last month, the January 2001 average rose to $16.39.

``What we are seeing is just how precariously balanced gas supply and demand are right now,'' said Kelley Doolan, chief editor of IFGMR. ``The market is very, very jittery. Players lack confidence that enough gas will be available if we see many more weeks of prolonged widespread cold. Each time there is a new weather forecast, the market moves by a dollar or two -- which five or six years ago was all that gas cost.''

For all of 2000, monthly supply-area spot prices nationwide rose a whopping 72.9% over 1999 levels to $3.77/MMBtu. It was the first year since the natural gas market was deregulated in the mid-1980s that the average landed above $3.00. The five-year annual supply-area average is $2.05/MMBtu.

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-- Martin Thompson (mthom1927@aol.com), January 04, 2001