May 2017 Energy Market Update
- Natural Gas prices flat to one month ago and up 30% from February 2017
- Midwest power prices up 1% – 2% directly connected to rising natural gas prices
- Production deficit and export growth keeping natural gas prices strong
- Above average natural gas storage levels keeping prices from rising more
- NOAA predicting higher than average temperatures June – August
- EIA forecasting 11.2 GW in 2017 and 25.4 GW in 2018 of new natural gas fired electric generation coming online
- LNG exports very strong so far in 2017 with the capacity to export 50% more by the end of 2017 likely.
The market hasn’t changed much the past month. Natural gas prices are only slightly up from prices a month ago. Electric prices are up slightly for the 2018 – 2021 years, but historically are still a great value compared to rates fixed 2 or 3 years ago. Monthly electric prices are up about 27% compared to a year ago, but long-term fixed prices are much more attractive. As answers to several key questions become a reality the direction of pricing will become more clear. Will a warmer than normal summer combined with the strong growth in new natural gas fired electric generation be a stimulant to rising natural gas and electric prices? Will natural gas production growth in 2017 meet and exceed growing natural gas demand? What other domestic and global events will play a role in energy prices in 2017 and 2018?
Many customers have natural gas and electric fixed price contracts ending this summer or over the next year. Our advice is to:
A. Look closely at your current price and end date and start planning a buying strategy for the next 2-3 years
B. Don’t be waiting for prices to fall…if current rates are close to current prices it may be wise to look closely at extended prices and
C. Don’t let your electric fixed rate move to a variable rate…like putting your finger in an outlet the result will be shocking.
Please feel free to contact us if you want to talk about your energy strategy. As we like to say; Learn it. Apply it. Benefit from it.
Read April 2017 Newsletter
RD Energy is Certified by the PUCO as a natural gas and power broker. We believe in creating a strategic energy purchasing strategy. Timely buying, Demand Response and Peak Load Management are key tools available to buyers. Given the opportunity RD Energy most often proves that more can be done to cut energy costs both for the short and long-term.
RD Energy does not make and expressly disclaims, any express or implied guaranty, representation or warranty regarding any opinions or statements set forth herein. RD Energy shall not be responsible for any reliance upon any information, opinions, or statements contained herein or for any omission or error of fact.