Natural gas prices square measure primarily a perform of market provide and demand. as a result of there square measure restricted short alternatives to fossil fuel as a fuel for heating and electricity generation throughout peak demand periods, changes in provide or demand over a brief amount might end in giant worth changes. Natural gas prices themselves typically act to balance provide and demand.
Factors on the supply-side that have an effect on Natural gas prices embrace fossil fuel production, web imports, and underground storage levels. will increase in provide tend to tug costs down, whereas decreases in provide tend to push costs up. will increase in costs tend to encourage production, imports, and sales from storage inventories. Declining costs tend to possess the alternative effects.
Factors on the demand-side embrace weather (temperatures), economic conditions, and oil costs. Weather condition (low temperatures) will increase demand for heating, whereas weather condition (high temperatures) will increase demand for cooling, that will increase fossil fuel demand by power plants. Economic conditions influence demand for fossil fuel, especially by makers. Demand may be moderated by petroleum fuel prices, which can be a cost-effective substitute for fossil fuel for power generators, manufacturers, and huge building house owners. Higher demand tends to steer to higher costs, whereas lower demand will cause lower Natural gas prices. will increase and reduces in Natural gas prices tend to scale back or increase demand.