The spot price for natural gas is near an all-time low, according to recent data from the Federal Reserve Bank of St. Louis.
As an alternative to other forms of energy, how could natural gas affect the markets?
The Data: The Fed St. Louis post references the price of natural gas at the Henry Hub in Erath, Louisiana. The post focuses on this location as an anchor for prices as it is connected to several pipelines and local market prices depend on differentials from the Henry Hub.
Much of the recent developments in natural gas can be attributed to an increase in supply. Although President Joe Biden has touted clean energy, the U.S. has solidified itself as a leader in oil and gas supply since Biden's inauguration in 2021.
Russian pipeline closures sent natural gas prices soaring in 2022, but high prices have subsided.
Heating Bills: Lower gas prices, of course, mean lower prices for heating bills. Russia's continued escalation of its conflict with Ukraine sent household heating bills soaring in late 2022 and early 2023. Lower gas prices will lead to less expensive heating bills, which was reflected in bills following the decline in gas prices.
In an economy where consumers have suffered the effects of inflation, any relief in household bills is sure to be a plus.
Natural Gas Vehicles: Natural gas can serve as vehicle fuel; however, CNG passenger cars haven't caught on substantially among consumers. Natural gas is still often used for heavy-duty fleets, such as school buses, tractors and concrete mixers.
Blue Bird Corp (NASDAQ: BLBD), an industry leader in alternative-powered school buses, produces thousands of gas/propane buses. The company projects to sell $1.3 billion in gas/propane buses in 2024 and up to $2 billion in the future. Blue Bird's share price has ballooned over 100% in 2024.
Volvo ADR (OTC: VLVLY) is likewise a major producer of natural gas truck fleets.
Clean Energy Fuels Corp (NASDAQ: CLNE) has a national footprint in providing natural gas to operators of trucks and school buses.