The December contract for natural gas delivery at the Henry Hub expired in trading on November 24 at $6.89 per MMBtu, gaining nearly 46 cents per MMBtu during its tenure as the near-month contract. At $6.89 per MMBtu, the December 2008 contract expired 32 cents or 4 percent below the expiry of the December 2007 contract. This marks the lowest level for the expiry of a December contract since the December 2003 contract expired at $4.86 per MMBtu.
The answer appears to be yes:
Not a real surprise.
While gas prices drastically dip down, heating costs keep climbing.
"Now we're estimating they'll increase about 7 percent this winter," said Dan Bishop of Consumers Energy.
Bishop says in December 2007 they were charging $7.78 per thousand cubic feet and this December that number jumps to $8.17.
"Last winter our typical customer paid about $150 per month during the winter, we're estimating that, that same customer may pay about $160 a month this winter, that's do to the fact that natural gas prices were a little bit higher than they were," Bishop said.
But Bishop says the percentage increase was initially expected to reach double digits, but he says simple supply and demand softened the blow.
"Natural gas suppliers have increased supplies to the overall market and there has been a slight reduction in terms of demand," Bishop said.