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www.fueloilnews.com | FUEL OIL NEWS | FEBRUARY 2014 25 EPA Proposes Updates to Air Standards for New Woodstoves Fuels Average wholesale prices for natural gas increased significantly throughout the United States in 2013 compared to 2012. The average wholesale price for natural gas at Henry Hub in Erath, Louisiana, the key benchmark location for pricing throughout the United States, rose 35% to $3.73 MMBtu in 2013. Increased winter demand pushed inventories down and prices up to above $4.00/MMBtu in March and April, but decreased consumption for electric generation over the summer and positive (but flattening) production growth kept 2013 prices at their lowest level since 2002 with the exception of 2012. The price increases were relatively uniform, except in the north- eastern United States, where cold-weather-driven demand spikes exacerbated the impact of pipeline constraints in Boston and New York City markets. The importance of supply changes for prices is shown at the Transco Leidy Hub in Pennsylvania where prices in 2013 were only 11% higher than in 2012, despite much greater abso- lute and percentage price increases at nearby hubs serving New York City and Boston. The Leidy Hub prices were most directly affected by continued growth in production from the Marcellus shale. Natural gas price movements often fall into season patterns, which held true in 2013, but also fall into regional patterns and affected pro- duction volumes as well as the futures market. Key trends along these lines are discussed below: January-April. Spot prices rose at the beginning of 2013 and exceeded $4.00/MMBtu in March, a level not reached since September 2011. • Record March withdrawals rounded off a return to seasonally cold temperatures during the 2012-13 winter, in which total withdrawals were 67% above 2011-12 winter levels. • A number of factors contributed to these increased with- drawals, including: record-high starting inventories, slower production growth, lower net imports, and increased cold-weath- er-driven residential and commercial demand alongside relatively high levels of winter electric power sector consumption. • As a result, the Henry Hub spot price averaged $4.17/MMBtu in April 2013, more than double the level a year earlier. However, this price level was still low in historical terms, and despite the high withdrawals, inventories were still at their second-highest end-March level since 1991. May-December. Spot prices decreased starting in May, and by August had declined to a monthly average of $3.40/MMBtu, before rising back above $4.00/MMBtu by year's end. • High injections took place during the initial summer months, the result of modest increases in production and a reduction in electric power sector consumption from year-ago levels. • Seasonally cool summer temperatures and relatively higher prices made natural gas less competitive with coal, reducing natural gas con- sumption in the electric power sector. • Prices rose slightly in September and October, and approached $4.00/MMBtu in November, which saw a record storage withdrawal for that month in its final week. In December, seasonally cold weather pushed prices above $4.50/MMBtu, and led to the second-highest weekly storage withdrawal on record. EIA REPoRt: New England and New York have largest natural gas price increases in 2013