The Bottom Line
Summer closes without high demand, and natural gas prices begin to rise ahead of the winter. Temperature trends are mild for the next few weeks and are expected to limit upward price movement.
Prices for this winter had risen over the past few weeks. Why? Winter demand expectations, storms in the Gulf of Mexico interrupting production, and the recent attacks on Saudi oil facilities. Both the Saudi attacks and the Gulf weather issues are diminishing and prices have begun to pull back from a recent peak. Prices are expected to remain soft until cold weather arrives.
NYMEX natural gas prices reached an extreme low this summer, and, despite some volatility, prices remain very low compared to historic levels. For the January 2020 NYMEX Natural Gas Futures contract prices dropped from a high of $3.23 to its current level at $2.77.
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 exports 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 proceeds, prices will begin to rise due to a reduction in active wells (shut down to reduce available supply) and 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.