THE WOODLANDS, Texas, June 2 /PRNewswire-FirstCall/ — Peter R. Huntsman, President and CEO of Huntsman Corporation , today blasted natural gas traders on the New York Mercantile Exchange (NYMEX) for continuing to foster high and volatile natural gas prices at consumers’ expense.
“Government data released today show a record amount of natural gas in inventory for this time of year, and demand for natural gas remains flat,” said Mr. Huntsman. “Yet in the last two trading sessions the price of gas on the NYMEX shot up more than 65 cents and closed up 44 cents. On an annualized basis that cost the U.S. economy between $10 billion and $15 billion. Why? Because, according to one analyst, ’Fund buying jumped in … and sent prices racing.’”
“In other words, hedge funds and other paper traders on the NYMEX continue to enrich themselves while U.S. gas consumers are forced to endure the result of the world’s highest and most volatile natural gas prices,” said Mr. Huntsman. “Industries continue to close and move off shore, American jobs continue to be lost, the nation’s farmers and senior citizens continue to suffer. The only ones who prosper are financial markets and traders that do not produce, transport or consume natural gas.
“Just this morning one of our nation’s largest financial institutions, in reporting on gas price futures, referred to the forecast of a worse than normal hurricane season and the possibility of decreasing gas imports, which would be excuses to force up the price, as ’good news.’ It makes absolutely no sense.”
Mr. Huntsman said he is surprised more natural gas consumers are not outraged with the imbalance in the U.S. economy created by “a natural gas pricing system that has been out of control since Congress enacted the Commodities Futures Modernization Act in 2000.”
He pointed to bi-partisan legislation working its way through Congress that “would go a long way to restoring some common sense” to natural gas markets.
HR 1638 would, among other things, restore pre-2000 transparency to natural gas trading markets, give the Commodities Futures Trading Commission real-time oversight of all natural gas trading, and re-impose pre-2000 limits that gas prices may move in a trading session.
“HR 1638 is not a cure-all,” said Mr. Huntsman. “But it certainly would help restore sanity to the market and reduce the harm being inflicted on the U.S. economy. Demand for natural gas has eroded in the past five years. We have record amounts of storage for this time of year. There is no fundamental reason for this nation’s gas prices to be this high or this volatile.”
Huntsman is a global manufacturer and marketer of commodity and differentiated chemicals. Its operating companies manufacture basic products for a variety of global industries including chemicals, plastics, automotive, aviation, footwear, paints and coatings, construction, technology, agriculture, health care, textiles, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging, and later, rapid and integrated growth in petrochemicals, Huntsman today has revenues of $11.5 billion, 11,300 employees and 62 operations in 22 countries.
Statements in this release that are not historical are forward-looking statements. These statements are based on management’s current beliefs and expectations. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the company’s operations, markets, products, services, prices and other factors as discussed in the Huntsman companies’ filings with the Securities and Exchange Commission. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. Accordingly, there can be no assurance that the company’s expectations will be realized. The company assumes no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.