What determines natural gas prices?
A. Like any commodity, natural gas prices are determined by supply and demand. Domestic production and consumption are important factors, and there are a number of variables that can affect each of these. Some of these other factors, such as the weather and our level of natural gas imports, are difficult to predict, contributing to the volatility in prices. In addition, natural gas competes with other energy sources in the production of electricity, so price levels of other fuels relative to gas can have an impact on gas consumption.
