From the WSJ Micro Review:
Natural-Gas Prices Fall Even With Chill Nearing
by: Timothy Puko
Oct 20, 2014
TOPICS: Supply and Demand
SUMMARY: When cold weather looms across the U.S., natural-gas prices usually rise. This year they are falling, after a record production boom nearly replenished stockpiles left at their lowest since 2003 by last winter's freeze.
CLASSROOM APPLICATION: Students can use supply and demand to examine the effects of shifts in both demand and supply on the equilibrium price of natural gas. Also, they can compare factors, such as weather, that have differing effects on the prices of two major energy sources: natural gas and oil. Lastly, they can examine how bottlenecks in supply chains affect prices.
1. (Advanced) How do weather forecasts affect the price of natural gas? Why does the weather have a greater effect on the price of natural gas than it does on the price of oil?
2. (Advanced) During periods of high demand for natural gas, how do bottlenecks in the natural gas supply chain affect the price of natural gas?
3. (Introductory) Why did prices for prices for natural gas last week reach to their lowest point of 2014?
Reviewed By: James Dearden, Lehigh University