NEW YORK (TheStreet) -- Eek! Natural gas now costs $6 per thousand cubic feet, a price not seen since briefly in 2010. Meanwhile, crude oil is trading well above $100 a barrel. There are going to be some unhappy consumers when they open their fuel bills this month.
Even more disheartening, I believe the relatively high price of both natural gas and crude oil are here to stay for 2014.
In natural gas, a steadily difficult winter has continued to drop stockpiles well below the five-year average. We are currently sitting at less than 1.5 trillion cubic feet in storage. With another cold snap of any kind before the spring, or even with an early onset of hot weather in May, we could see lifetime-low stockpiles of close to 1 trillion cubic feet.
Furthermore, American exploration and production companies have worked hard in the past two years to shut down production of dry gas assets, preferring to concentrate on shale oil and NGL production. It will be difficult to ramp up production for gas anytime soon.
Finally, there's nothing like the trader shark tank of natural gas once it gets running. I remember often from my on-the-floor days seeing natural gas rocket upwards with very little catalyst except the "hot trade" idea of the week. It is a classic counter-intuitive move to see natural gas trade today above $6/mcf precisely on the day that snow is rapidly melting here in the northeast and temps are expected to be in the 50s for the upcoming weekend.