Anatomy of a Natural Gas Price Spike

Figure 1. Natural gas average wellhead price and estimated production cost including a 10% rate of return. (On all graphs, click for larger image.)

I wanted to explore the recent history of natural gas prices and try to see what patterns existed and if those patterns could help us predict future prices. In this article I lay out an argument that the price spike of 2001 led to the price spike of 2003. And that our recent spike of 2008 will lead to another spike in 2010 (possibly made worse by the credit collapse).