I had the pleasure of attending the National Oil & Gas Conference in Denver this past week. This conference was unlike most national conferences presented by the AICPA, which usually focuses on technical accounting, auditing and tax matters. This conference’s emphasis was on the oil and gas industry. The conference covered topics including internal audit functions, mergers and acquisitions, gas prices, supply chain management and fraud.
One particular session dealt with gas prices. The presenter explained the various factors that impact the price with weather having the biggest impact on the demand. A hot summer demands electricity and results in more natural gas-powered facilities coming on-line. A cold winter is as equally demanding of natural gas.
This past winter was the warmest in over 60 years, which caused an excessive supply of natural gas inventory. As a result, natural gas prices were pushed down. For 2013 prices, experts forecast that if we have a warm winter again, prices will be around $2.00/mcf and as high as $5.00/mcf if we have a cold winter.
© 2012 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.