What to Know, Now: Energy Market Update June 2018


Summer begins. Still a buying opportunity.

The Bottom Line

Current prices for electricity and natural gas compare favorably to 2017 rates and present opportunities to reduce costs through supply contracts. Today’s lower prices are supported by record high levels of natural gas production.

What to know about 2018

While today’s prices are still low, there is concern this hot summer will cause high demand for electric generation to meet cooling needs. Continued increasing exports of liquified natural gas (LNG) will reduce available gas for winter storage. If both a hot summer and increased exports occur, there may be a reversal and prices may rise this summer and winter. If you have contracts expiring in 2018 or early 2019, you will want to price them early and evaluate your timing on completing your supply contracts. If you are receiving procurement services from Bright Power, we are already completing or planning this evaluation for you.

Why Act Now

In the past month, hot weather and hot forecasts have buoyed prices up, while increased production of gas has kept prices in range. These factors may fall out of balance, increasing the risk of higher prices this summer and winter. As many property owners and managers are risk averse, it is clearly a time to protect prices this summer and to prepare to capture the winter prices if the market remains favorable.