The deep freeze that we faced over the past few days – along with much of the rest of the nation – has had a major effect on our lives this week, but it also may have longer term ramifications for our economy. Demand for natural gas has peaked to an all-time high, with one firm estimating that Monday would set a record of 125.7 billion cubic feet to be consumed.
Of course, prices are following close behind. Generally, in the wintertime, a contract for a million BTUs of natural gas costs about $20. Last Friday, it was at $13.61. But on Tuesday of this week, a price for one contract in New York reached $99 for a million BTUs – a record.
Fortunately, most natural gas is bought well in advance, so the day-to-day price doesn’t fluctuate as much as that of gasoline. But since the start of November, futures prices for natural gas are up by more than 20 percent overall.
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