Effects of warm winter weather a mixed bag

ORIGINALLY WRITTEN CYNTHIA MARTENS
The natural gas companies and propane suppliers have good news for homeowners using either fuel to heat their home during this unusually warmer winter-a winter that has seen milder temperatures lasting up through the middle of January.


“Gas prices are down,” said Glenn Youngblood, industrial sales representative of Greeley Gas Co.


Natural gas prices are down compared to last year because consumer demand is down, Youngblood said.


And consumer demand is down because of the warmer weather.


Earl Mueller, manager at Cardie Oil, said he agrees with Youngblood.


“Natural gas is down some from last year because of less demand and probably because of the warm weather and then the economy.”


A projected outlook for this winter indicates consumer prices for fuel are expected to be lower than last winter under normal weather conditions, according to information from the Department of Energy Web site, www.eia.doe.gov.


According to the DOE, winter is defined as the period from October 2001 to March 2002. Residential natural gas prices are projected to be down 29 percent and propane prices down about 17 percent compared to last winter.


Any supply and demand balances anticipated are generally adequate to minimize the risk of price run-ups if colder weather patterns should occur during the remaining winter months.


Comparing natural gas prices to propane prices, Youngblood and Mueller agree that propane prices are generally higher than natural gas.


Natural gas and propane come out of the well, Youngblood said.


“It’s a mixed product and has to be separated,” he said. “Propane is more expensive because it has further processing it has to go through.”


Mueller said, “Natural gas generally runs some cheaper, but last year there were times when propane was cheaper. It was the difference in the market, and there’s a lot of things at play in the marketplace.”


In the past, propane users were pre-purchasing their winter gas to gain a financial advantage over prices expected to rise later in winter.


“A couple of years ago there was a time when you pre-purchased gas at, for example, 45 cents, and then it went up to as high as $1 during the winter,” Mueller said. “So you were wise having done that.


“But this year the gallons you pre-purchased have maintained a steady price because of the less cool temperatures and weak economy.”

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