What to Know, Now: Energy Market Update: October 2018


Winter is coming. Higher prices are here and they may stay. 

The Bottom Line

Natural gas price volatility continues, and with it comes higher rates. In the last month, there has been a price jump that amounts to $.04/therm increase on a 12-month natural gas fixed rate. It’s not a great time to lock in. And you should try to avoid the high utility default rates. What does that mean? You should consider short-term winter buys or variable products which may perform better than long-term fixed rates. But you don’t have to go it alone – we can help make those options clear and explain the benefits and risks.

What to Know About 2018

What’s the cause of this volatile market? Low amounts of natural gas in supply. The US maintains storage of gas that ensures we have enough gas for winter heating. But compared to this time last year, there is now 16% less gas available. Although production has increased and will continue to pick up, we’re likely to continue to see a volatile natural gas market due to low gas storage. While we don’t recommend having accounts return to utility rates and receive default pricing, it may be beneficial to explore other pricing options before locking in for multiple years at high rates. Unsure how to proceed? Our energy markets experts are here to help and provide clear recommendations.

Temperature Probability Maps

This fall and winter are forecasted to have warmer than usual temperatures. A mild fall that doesn’t require much heating in the North East would improve gas storage conditions and bring down prices. An average cold East Coast and Plains winter would reduce stored gas levels further and raise prices through all of 2019.