The following article was reported by the Pittsburgh Business Times
Reporter: Stephanie Novak
The cold weather we’re having has been heating up natural gas prices to the highest levels in nearly four years.
Bloomberg reported on the prices last week that were $5.442 per million British thermal units, thanks to the cold weather that has been hitting the Northeast. But prices have fallen about 6 percent since then, with forecasts of warmer weather in February than the cold this week.
“Even though the price of natural gas is cyclical and can vary widely, the recent increases are good for the shale industry,” said Kathryn Klaber, former CEO of the Marcellus Shale Coalition and principal of environmental consulting firm The Klaber Group in Sewickley.
This will add to an already favorable market that has been growing since 2012.
“For natural gas companies, the increase in pricing gives them a nice pay window for earnings,” said Mauricio Viaud, senior research analyst at Hefren Tillotson. “I think for quarterly earnings, you’ll probably see a spike.”
And the increase in revenue that companies are getting from the cold is added on to an already bullish market, largely resulting from new infrastructure investments.
“Some of the larger price points that you’ve seen in recent weeks are more infrastructure driven than anything,” said Matt Pitzarella, a spokesperson for Range Resources Corp. (NYSE: RRC). “Increased consumption and pricing is not a bad thing, but the outlook for natural gas in the long run is even better with federal and international agencies and other experts predicting natural gas to be the fastest-growing fuel through 2040.”
Range’s third quarter production reached their highest-ever levels, largely due to continued development in the Marcellus and Utica Shales. Seventy-seven percent of the company’s production came from natural gas.
Companies invested in liquid gas stand to turn a higher profit, Viaud said.
“The prospects for energy growth, especially in the area, look pretty compelling,” he said.