Insulated by geography from the crisis in the Persian Gulf and by the structure of the market from panic buying on futures exchanges, the price of natural gas is hovering near its lowest point since the mid-1980s.

The rock-bottom price is bad news for producers but an economic boon for industrial and residential consumers, who have found a widening gap between the price of gas and the fast-rising price of fuel oil.

Analysts assume the price of gas will rise as usual with the onset of winter, but in the meantime, some utilities are advertising the lures of low prices and assured availability to wean residential consumers away from oil heat. The entire industry is "aggressively working to develop new markets," according to the American Gas Association.

Brian Alexander, sales director for Washington Gas Light Co., reported a "steady and persistent increase in conversions" from oil to gas.

While precise figures for industrial consumers are not available, many analysts believe the persistently low price of natural gas has induced so many to switch from fuel oil that the Energy Department's attempt to promote such "fuel switching" as a way to save oil will have little effect.

"By and large, the potential gas users are already on gas because the price is so low," said Daniel Dreyfus, vice president of the industry-funded Gas Research Institute.

There is no official or centralized price of natural gas. Natural gas futures are traded on the New York Mercantile Exchange, but that is a fledgling operation where speculative buying and selling has little influence on spot-market prices.

The actual price of gas varies from region to region and producer to producer. One widely quoted price is the Louisiana "FOB spot price," as tracked by Natural Gas Week, a trade publication. That price, which was $2.89 per million British thermal units in 1985, was below $1.40 last month and was $1.42 at the end of last week. On average, "prices in real dollars are the lowest in five years or so," Dreyfus said.

There appears to be no dispute about the reason for the low price: abundant domestic supply. The United States imports about half its crude oil but only 7 percent of its natural gas, and the gas imports are from Canada, a friendly neighbor.

Normally, prices in the New York market per unit of energy produced were almost in parity for gas and fuel oil, according to Tom Manning, a director of the Houston-based energy consulting firm Purvin & Geertz. "Since the oil price shock hit, fuel oil prices have gone up but gas didn't because ... {the} air conditioning season is ending and {the} heating season hasn't started. So gas is very long {in supply} while oil is short," he said.

"Gas cost less than oil before this mess started," said Ben Schlesinger, a Bethesda gas industry analyst. "Now it's a lot less."

He said the price differential could be expected to create an increase in demand that would push gas prices up, but "demand can only increase by re-engineering the system to add pipelines and pumps" -- investments that gas distributors are reluctant to make with prices so low.

Oil generates about 42 percent of all the energy consumed in the United States, gas 24 percent, according to the American Gas Association. For many years, wellhead prices were controlled by federal law and the use of natural gas to generate electricity was prohibited because of supply shortages.

All such restrictions have now been lifted, but producers who expected a cycle of rising demand followed by rising prices followed by rising output have been frustrated by the realities of the marketplace.

"We're really at a loss to figure out why gas prices haven't been higher," said William D. Hermann, chief economist of Chevron Corp., the nation's biggest producer. "We bet heavily on it." Chevron paid $2.6 billion in 1988 for Tenneco Corp.'s Gulf of Mexico gas reserves.

Paul Hilliard, an independent Louisiana gas producer and chairman of the Independent Petroleum Association of America, complained last week that the low prices are "putting the independents out of business" because they cannot earn enough on their gas to cover the cost of drilling for it.

Big producers such as Chevron have to keep increasing their output even as prices fall to cover their debt, according to Jack Copeland, a Washington-based energy consultant, so they are flooding the market with gas at prices so low that independent producers cannot compete.

There is no direct correlation between the price of oil and the price of natural gas, but many analysts believe that price extremes in the oil market -- such as the very low prices of last spring and the relatively very high prices expected this winter -- do influence natural gas prices. That could mean a strong resurgence in gas prices by January.