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).
Take Action
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.