April 2019 Energy Market Update
The Bottom Line
Winter has left us with a large deficit of natural gas in storage which will potentially lead to price volatility if we have a hot summer, as forecasted. This spring is presenting good buying opportunities in many markets as high natural gas production levels are keeping prices in check before the summer arrives. Be prepared: weather driven price changes and high summer heat could impact winter prices.
What You Need To Know About The Rest Of 2019
While natural gas production is estimated to outpace consumption, it is not expected to bring back a surplus (and much lower prices). A mild summer or winter can help reverse this trend and soften prices. If you have accounts on utility supply or a variable rate, this is a good time to consider moving to a fixed rate because prices have declined and there is a risk for summertime price increases. If you have contracts expiring between now and this summer, we recommend you price them early and evaluate your timing on completing your next supply contracts.
Temperature Probability Maps
Current temperature forecasts for 2019 are calling for above normal temperatures across most of the United States. A moderate El Niño is also expected, which will bring more heat to the western U.S. and a bit less heat plus more precipitation to the eastern U.S. If these forecasts hold, we could see high air conditioning demand impact natural gas storage and prices, with potential price increases for energy into 2020. Conversely, if temperatures are mild, the high production levels of natural gas could allow for improvements in storage and softening of prices.
