Natural Gas Producers Savor Price Spike
Natural gas prices hit a 5-year high this week in response to news that another bout of extreme cold weather will hit the Northeast and Midwest in coming days. Previous cold snaps this winter have led to record consumption of natural gas, which in turn has drawn down reserves. In response, prices have climbed more than 40 percent since the beginning of the year, reaching over $6 per million BTU Wednesday.
Doug Hock is a spokesman for Encana, the largest natural producer in Wyoming. He says the upswing is a welcome change of pace, after years of low prices.
“But I think as we look out over the longer-term, given the large supply of natural gas in the market, over the longer-term we don’t see the price going way up and staying way up,” Hock says.
In light of that, the company isn’t changing its plan to focus on oil development this year, rather than natural gas. The higher prices might actually speed up that transition.
“The stronger prices, that means stronger cash flow, which helps us then to provide the cash for growth that we’re looking at from our liquids and oil,” Hock says.