Natural gas prices skyrocketed today on the news that the storage dropped by 65Bcf. UNG was up 6%, even though storage is way above average and industrial consumption is still very weak.
Even though prices are at decades low, citizens on both sides of the border are not benefitting equally. Please take a look at the prices paid by two immediately neighboring regions, Michigan and Ontario.
Michigan, October 2009 bill: US$ 48.06 for 3,800 cubic feet.
Across the river in Ontario, here is a November 2009 bill:
These two bills represent very similar consumption levels.
Per cubic foot, the final cost is 12.64c in Michigan. In Ontario it is 28.29c. This includes all taxes, delivery charges, etc. Natural gas in Ontario costs 2.23 more, or 123%. This after prices have dropped in Ontario from around 33c/cu ft to 12.95c/cu ft. It's all the extras that make up the difference. My bills last year were around $300/$400 per month, now they are only $115...
Enbridge (ENB) does the delivery and Encana (ECA) is the big producer.
Enbridge is up around 36% this year while Encana was up 8% (until it split into two separate entities for oil and gas).
Seems like and high margins and easy money for these companies.
Many thanks to miadhach for his invaluable contribution with the Michigan part of this report.