The price of natural gas continued its two-month surge this week as cold weather helped fuel strong demand.
The U.S. Department of Energy said Thursday the country's natural gas supplies fell by 285 billion cubic feet over the past week as consumers throughout much of the country turned up their heaters to stay warm.
The high demand knocked storage levels 261 billion cubic feet below the five-year average.
There's no threat of the country running low on natural gas this winter, but the larger-than-expected drawdown caused the price to jump nearly 5 percent Thursday, closing at $4.46 per thousand cubic feet.
The trend is good news for Oklahoma producers, who have seen prices tumble in recent years, hitting a low of $1.90 per thousand cubic feet last year.
Natural gas production has held fairly steady over the past year or so. Few producers in this part of the country are drilling wells designed to produce only or mostly natural gas.
But as they search for oil, companies are still recovering a strong amount of natural gas.
With production flat, weather stands to have the greatest effect on natural gas prices over the next several months.
“If it stays cold, which most people are predicting it will, then I think you'll see gas prices stay in the $4.25 to $4.50 range,” said Tony Say, president of Oklahoma City-based Clearwater Enterprises. “But if for some reason, the weather pattern changes and we get a milder January, I think we'll see numbers below $4 going into February and March.”
After a few days of unusually warm winter weather, another cold front is expected to sweep through Oklahoma this weekend. The cold weather is then likely to sweep through the population centers in the eastern part of the country, which have the greatest effect on the price of natural gas.
The price has been trending upward for much of the past two years, but the movement has been much slower than many natural gas producers have hoped.
The price for a barrel of crude oil — which contains 6 times the energy content as 1,000 cubic feet of natural gas — closed Thursday at $98.77, more than 22 times the price of natural gas.