Here’s a bit of news homeowners looking to heat their homes this winter will be happy to see: fracking is flooding the marketplace with cheap natural gas, which is depressing prices even as demand starts ramping up now that the cold weather months are approaching. Consumers won’t immediately see this change reflected in their gas bills, as utilities have been buying up relatively expensive gas during warmer months this year, but it is a sign that the U.S. is more or less ready for another winter, after an especially cold experience last year. The Wall Street Journal reports:
Investors started the spring with some of their strongest bullish positions in at least eight years as the impact of last winter’s historic cold lingered. With stockpiles low, prices stayed more than 11% higher through the spring and summer than they had been a year earlier. The increase reflected concern that producers might not be able to rebuild inventories fast enough for this winter.Instead, with prices elevated, energy companies drilled even more, filling pipelines and storage tanks. […]Prices for the fuel used to heat half of American homes fell to their lowest point of 2014 on Friday in intraday trading and are down 9.3% since Sept. 29 on speculation that further supply additions could lead to a glut…The EIA’s latest forecast for six months of residential prices dropped from what it had predicted in June.
This is another case of fracking’s might being borne out by something we’re not seeing: were it not for the American shale boom, the gas industry would be struggling mightily to resupply stockpiles for the months ahead, when demand once again outstrips supply. So this winter, when you look at your gas bill and grimace, think to yourself two things: first, it might be smart to wear a sweater in the house, and second, it could be a lot worse.