WASHINGTON, D.C. — The government released a short-term energy outlook last week, revising projections for natural-gas prices upward. According to a report from the Energy Information Administration (EIA), natural gas will cost a whopping 52% more this year than last year.
Two months ago, the same forecast projected a 16.5% hike in the price of natural gas from last year, and last month, the projection was a 35% increase. Natural gas spot prices averaged $7.17 per thousand cubic feet (Mcf) in 2007 and are now expected to average more than $11 per Mcf in 2008 and 2009.
High oil prices, lower imports of liquid natural gas, growing consumption and a year-over-year decline in inventories are contributing to price increases, the government says. Factors such as an active hurricane season could alter projections even more, EIA reports, and conditions will likely continue to keep prices high.