Floyd Norris
THE price of gas has risen rapidly this year.
The price of gas has fallen to the lowest level in a decade.
Both of those statements are true. The first refers to gasoline, the second to natural gas.
As the accompanying charts indicate, never in the two decades that natural gas and oil futures have traded have their prices diverged as much as they have now. On an energy equivalent basis, oil costs more than eight times as much as natural gas.
This week, the price of a million B.T.U.’s of natural gas fell below $2.20 for the first time since 2002, while oil prices slipped a little but remained above $100 a barrel. The last time natural gas was this inexpensive, oil cost about $20 a barrel.
The diverging prices reflect the fact that while oil and natural gas can substitute for each other in some uses, the markets for the two products are very different.
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