Natural gas prices edge higher

CEDAR RAPIDS - Natural gas prices edged up in the week that ended on Tuesday, boosted by expectations of higher demand due to colder weather over the next two weeks.

Prices were 33 cents higher at the Henry Hub in Erath, La., reporting site and ended the week at $2.08 per million British thermal units. Futures for February delivery recently rose 12.2 cents, or 5.5 percent, to $2.336 per million British thermal units on the New York Mercantile Exchange.

About 50 percent the households in the United States use natural gas as a primary heating fuel. Weekly inventory data released Thursday showed that stockpiles of natural gas declined more than expected last week, helping support the market.

Natural gas prices are down more than 19 percent over the last year. After posting a 32 percent decline in 2014 due to soaring production, prices have come under pressure again this year due to continued ample output and weak demand.

A strong El Nino weather pattern has reduced the demand for heating fuels in the United States in recent months, driving up natural gas supplies to a record in November.

Natural gas inventories fell by 58 billion cubic feet in the week that ended on Dec. 25, the U.S. Energy Information Administration reported Thursday.

According to the U.S. National Oceanic and Atmospheric Administration, heating demand has been 23 percent lower than normal so far during the current heating season, which began in July. Between September and November, every state in the continental United States enjoyed above average temperatures.

The Iowa Department of Agriculture, in its weekly fuels report Thursday, reported the price of regular unleaded gasoline averaged $1.92 per gallon across Iowa as of Tuesday, 2 cents per gallon lower than last week and down 16 cents per gallon from a year ago.

Unleaded regular gasoline has been selling for as low as $1.72 per gallon on the west side of Cedar Rapids and in Marion, according to www.GasBuddy.com. The lowest price for unleaded regular in Iowa is $1.59 per gallon in Clear Lake.

Diesel fuel prices in Iowa were 5 cents per gallon lower on Tuesday with a statewide average $2.11 per gallon. That represents a decline from a year ago when diesel prices averaged $2.98 per gallon in Iowa.

Propane prices were 2 cents per gallon higher Tuesday compared with last week's statewide average $1.01 per gallon.

Since 2013-14, domestic propane production has increased, propane infrastructure and market participants have adjusted to new supply patterns, Midwest propane inventories are much higher, and total U.S. propane inventories are at the highest levels on record, according to the U.S. Energy Information Agency.