February 2019 Energy Market Update
Winter Market Cools, Summer Could Be Hot
The Bottom Line
Midway through winter, market prices have settled down with the help of very mild weather and limited cold periods. Because the extreme cold last week came after mild weather, the markets barely moved. Unless we experience more extreme cold weather, that stability should continue. But the forecasted above normal temperatures this summer could lead to higher electric and natural gas rates.
What You Need To Know About The Rest Of 2019
We are currently in a favorable period for buying energy as we approach the “shoulder months” of spring between winter cold and summer heat. Prices for fixed-rate contracts are lower than 2018 for many accounts and make this a good time to review supply contracts. If this summer is as hot as forecasted, electric prices may rise and natural gas storage growth would slow, all leading to potentially high prices next winter. In the NYC market, we are now seeing natural gas fixed prices below $0.50/therm and electric rates at $0.065/kwh.
Unsure if now is a good time to lock in? Our energy markets experts can help you understand current rates and make recommendations based on your tolerance for risk.
Temperature Probability Maps
While we will likely escape extreme cold (and it’s price shocks) for the rest of this winter, the remainder of the year is forecasted to have above normal temperatures. A hot summer could trigger short- and long-term price increases, while a mild winter could create a very soft, lower-priced market. But, weather is not predictable and extreme weather is our new norm. If you are responsible for controlling energy costs, now is a good time to consider fixed price contracts.