January 2018 Energy Market Update
- High natural gas storage withdrawals over the next month
- Can natural gas supply keep pace with demand
- Currently NYMEX is trading at $3.05/MMBTU
The non-heating and no air conditioning “shoulder season” extended well into early November in 2017 pushing NYMEX prices down to $2.738/MMBTU the second lowest level of 2017. When the cold arrived in December it would be an understatement to say that it arrived with a passion. Since Christmas the cold has been brutal and bone chilling in the Midwest and Northeast. It will moderate to more normal to slightly below normal temperatures starting on the 8th. By the 17th forecasters are calling for slightly above normal temperatures. However, we should see some very strong storage withdrawals starting this week. It will be interesting to see how large the storage withdrawals are each week for the next month and their effect on NYMEX prices. Long-term the bullish factors remain: rising natural gas exports, higher use of natural gas in the generation of electric and higher energy use in a strong economy. The key question is can natural gas production keep pace. The supplies are in the ground. However, the country is already producing natural gas at a record pace. Many industry experts believe America’s producers can keep up. 2018 will likely prove if they are right or wrong. We’ve been working hard to keep customer’s contracts renewed when natural gas and electric prices dip in case energy prices do respond with a strong upward push.