Inflation was a little “hot” based on the CPI for February. It rose 3.2% year over year, which was higher than expected. It was still low compared to the pace of 8% or better two years ago. Among the reasons for this slowing was the cost of gas utilities, which dropped 8.8% last month. (This state has the lowest cost of living.)
The official designation of gas utilities is the price of natural gas used in the home. Not only have they fallen, but they are expected to fall more. According to MarketWatch, “The U.S. Energy Information Administration lowered its expectations for natural gas prices this year, citing a large surplus in storage after a mild winter curbed demand for the fuel.”
Natural gas is being produced at near-record levels. And the amount in storage facilities is near record highs.
Climate change has played a significant role. Last month was the hottest February on record. In some parts of the United States, temperatures were as much as 20 degrees Fahrenheit above long-term averages. Even ice levels on the Great Lakes hit record lows.
Where are natural gas prices going? Abundant supply and what likely will be a very warm spring are bound to keep them low.
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