The People of America's Oil and Natural Gas Indusry

Did You Know? Econ 101

Jane Van Ryan

Jane Van Ryan
Posted August 31, 2009

Did you know that the laws of supply and demand have a huge impact on energy costs?

As the Associated Press reported on Aug. 27, the price of natural gas fell to its lowest level in seven years last week after the Energy Information Administration reported that underground storage areas are filling up. In trading last Thursday, natural gas prices dropped to as low as $2.692 per 1,000 cubic feet--the lowest price since August 7, 2002.

The cause: Manufacturers have been cutting back their production and reducing their consumption of natural gas. It's Econ 101--ample supplies and low demand tend to put downward pressure on prices.

The recession has had a similar impact on gasoline prices. Last week the price of gasoline was more than $1.00 cheaper than at the same time last year.

ABOUT THE AUTHOR

Jane Van Ryan was formerly senior communications manager and new media advisor at the American Petroleum Institute (API), where she wrote blog posts and produced podcasts and videos. Before coming to API, Jane managed communications for a large science and engineering corporation, and for a top-tier research and engineering university. A few years ago, you might have seen her in your living room when she delivered the news on television. Jane officially retired from API in 2011 and now freelances as an independent communications consultant when not gardening at her farm in Virginia.