Why have natural gas commodity prices fallen since 2005?
In the late summer of 2005, hurricane activity in the U.S. Gulf Coast damaged natural gas infrastructure in the region and shut in significant amounts of natural gas production. As a result, North American natural gas prices reached unprecedented highs. Since then, prices have declined considerably, due primarily to significant production recovery from hurricane disruptions. In addition, two weather factors in 2006 have supported lower natural gas prices – warm winter weather in 2005/06 and an inactive hurricane season in the U.S. Warmer weather throughout the 2005/06 winter resulted in lower residential and commercial demand, allowing more natural gas to be injected into storage. Second, a relatively inactive hurricane season this year has meant that there have been no further hurricane-induced natural gas production shut-ins. At the same time, this has also allowed producers in the U.S. Gulf Coast to restore infrastructure and production to near pre-hurricane levels. Finally, crude o
