Natural gas price drops hurt Oklahoma companies
Warmer weather and still-increasing production have combined to cause natural gas prices to tumble.
Natural gas prices have not started out well in 2013 for Oklahoma energy producers.
The price slipped 16 cents, or nearly 5 percent, over the first two trading sessions of the year to close at $3.19 per thousand cubic feet Thursday.
The drop continues a six-week slide that is instilling concern in some Oklahoma producers, royalty owners and related companies that had been hopeful when the natural gas price climbed for seven months earlier in the year.
Lower natural gas prices are good for consumers and for industries such as manufacturing and chemicals production. But in a state where more than 340,000 jobs are directly or indirectly fueled by the oil and natural gas industry, the price slide can be worrisome.
The most recent downturn has been sparked by reports that the country's natural gas storage inventories recently hit a record high of more than 3.9 trillion cubic feet and by forecasts of moderate temperatures for at least the next two weeks.
But not everyone is worried.
Tony Say, president of Oklahoma City-based Clearwater Enterprises Inc., said the price slip is an overreaction.
“Behind this moderating weather, there is supposed to be some pretty cold weather in the next 10 to 15 days,” he said. “Hopefully that will move things back up a bit.”
Say said he expects prices to stay within a range of $3 to $3.50 throughout the winter and that the price could climb higher in the spring as production continues to drop.
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