The data from data released by Platts, the energy information business of The McGraw-Hill Companies indicates that the average U.S. monthly natural gas spot price for March dropped 11.8 percent from February, to $6.67/MMBtu, following a 24 percent decline a month earlier, but the average wholesale price for this winter's November-through-March heating season was $9.26/MMBtu, 43.1percent higher than the $6.47/MMBtu average for the 2004-2005 winter and 81.9 percent above the $5.09/MMBtu average for five previous winters, according to data from an exclusive survey by Inside FERC's Gas Market Report, whose spot price surveys set the benchmark prices for most monthly spot contracts in North America.
"Despite record mild weather and relatively soft demand, natural gas prices went through the roof this winter due to the lingering effects of twin late-summer hurricanes that caused widespread damage to the Gulf Coast producing region, historically strong oil prices and growing linkage between North American natural gas markets and others around the globe," said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC's Gas Market Report. "Over the past two months, average spot prices have dropped by more than a third as unusually mild weather across most of the U.S. has allowed natural gas inventories in storage to remain well above seasonal norms. But had this winter been colder than normal or even normally cold, we might not have seen much of a price decline at all."
Regionally, the Northeast was the highest-priced market this winter. The November-through-March wholesale average for the region was $11.67/MMBtu, 46.2% above last winter and 82.3% over the previous five winters, which averaged $6.40/MMBtu. Within the region, winter deliveries to the premium New York City market averaged $12.28/MMBtu. For March alone, the Northeast wholesale average dropped 17.2% from February, to $7.73/MMBtu. The March average declined for New York City by 19.5%, to $7.87/MMBtu.
In the upper-Midwest market area -- another typically premium-priced winter market that includes Chicago, Michigan and South Ontario -- the heating-season average was 43.8% above last year, at $10.05/MMBtu. That average wholesale price is 82.7% higher than the $5.50/MMBtu average of the previous five winters. For March, the upper-Midwest average price was $7.17/MMBtu, a decline of 13.6% from the February average.
Along the Louisiana Gulf Coast, the average price for monthly wholesale contracts delivered to 14 interstate pipelines was $10.35/MMBtu for November through March. That heating-season average was 51.5% higher than last year's and nearly double the $5.28/MMBtu average of the previous five winters. For March, the Louisiana Gulf Coast average was $7.02/MMBtu, a 15.3% decline from February.
At Louisiana's Henry Hub -- the physical delivery location named in the New York Mercantile Exchange's natural gas futures contract -- the average heating-season price was $10.42/MMBtu, 52.3% above the same period a year ago and 96.2% higher than the average for the previous five years.
In the West, at the Southern California border, the November-through-March average was $8.63/MMBtu, 39.1% higher than last winter and 40.3% above the five-year average. For March, the SoCal average price dropped by 10.1% from February, to $6.35/MMBtu.
