Yesterday there was an 18% increase in natural gas prices! If you do not have a fixed rate natural gas contract, you could see an estimated 30% increase in your heating and electric bills this winter.
What Caused the Price Spike?
Two factors regularly impact natural gas pricing: the weather (demand) and the amount of stored natural gas (supply).
Weather Drives Up Demand: November is predicted to be one of the coldest on record since 1950, and as a result buildings across the country are using more natural gas than predicted.
Supply is Depleting: Normally, a strain on storage would not cause this unprecedented price reaction. But, if you saw our market update last month, you know that the U.S.’s stored natural gas supply is 15% lower than this time last year and 16% lower than the 5-year average – the lowest since 2003.
Price volatility in winter months is not unusual, but financial speculation of the natural gas market is compounding the issue, resulting in a 49% increase in just two weeks (see chart below).
Some of you will be more vulnerable to this price hike than others. Contact us as soon as possible if you:
- Do not have fixed rate natural gas contracts
- Are on the utility rate
- Are on a fixed rate contract set to expire before June 2019
We will work with you to determine the best course of action based on your current rates, risk tolerance, and budgets.