The Bottom Line
A lack of significant air conditioning demand and a drop off in LNG exports has increased storage levels of natural gas and driven down natural gas prices to extreme lows. This unexpected market change has caused prices to drop to multi-year lows. For the January 2020 NYMEX Natural Gas Futures contract prices dropped 21% from a January high of $3.23 to its current level at $2.52.
Jan 2020 NYMEX Natural Gas Futures – Price History
For those of you who need to perform to budgets soon, pay close attention: this trend has created an excellent opportunity to lock in low priced fixed supply.
Customers who are on index pricing are also seeing very low rates at this time. We expect these prices to remain while there is no prolonged summer heat and LNG export remain at low levels.
What to Know About 2019
While natural gas production is estimated to outpace consumption, it is not expected to bring back a large surplus. We expect that as the fall approaches, prices will begin to rise because of impacts from a reduction in active wells (shut down to reduce available supply) and with winter weather concerns.
What To Do Now
Prices are currently very low for natural gas and only slightly reduced for electricity. If you have accounts on utility supply or a variable rate, this is a good time to consider moving to a fixed rate.