RD Energy Newsletter: November 2018.  Surging Prices With Colder Forecasts!

November 2018 Energy Update

Key Drivers:

  1. Colder updated weather forecast is causing December 2018 NYMEX to surge $.24 early on 11/5 to $3.53/MMBTU.
  2. The natural gas storage deficit continues to range from 10% – 24% regionally throughout the United States
  3. November 2018 NYMEX settled at $3.185/MMBTU versus November 2017 at $2.752/MMBTU
  4. Natural gas production continues to rise, but so does natural gas demand
  5. New pipelines in Ohio is taking gas once boundary bound to more valuable points outside of Ohio
  6. Due to the tight balance of supply and demand, the natural gas supply/demand balance makes prices will be more volatile
  7. Weather forecasts will push the price volatility extremes as weather forecasts get updated from warmer and colder and back
  8. Natural gas prices are the key driver for electric prices.  They run in close parallel.

Commentary
Here’s what we know:  The coldest shot of cold weather this year is going to hit the eastern half the U.S. later this week and continue for a week or more. When we have a very tight demand and supply balance in the U. S. prices are more volatile. Prices are rising substantially today, as new cold temperatures are seen in the forecast updated from last week. Natural gas supply in the U.S. continues to grow slightly most weeks while natural gas demand continues to increase as well.  Not only is storage running at a deficit in the U.S., but also in eastern Canada.  A new Rover pipeline is taking Eastern Ohio, Western PA and WV natural gas production mostly to others distribution points in the U.S. and to a lesser percentage to Michigan and eastern Canada.  Piping the natural gas surplus out of these states could raise prices for Midwest customers as cold weather takes hold since the previously trapped local surplus in these states now has more markets in which to flow.  Anytime there’s a tight supply and demand balance involving any product a sudden growth of short-term demand for that product can throw out the balance causing prices to rise substantially.  The same is especially true for natural gas.  Temperatures in the Midwest are forecasted to be mostly normal or even slightly above normal some days for the first half of the month, but some temperature models are starting to forecast colder trends the second half of November.  We continue to suggest to our clients that if they have natural gas and electric agreement end dates anytime in the next year or year and a half, let’s review prices now for future delivery so we can look for attractive opportunities and defend against upward trending price risk.

Pass The Word About RD Energy

We never want to inconvenience you, but what we’re seeing in the consumer markets right now makes us ask for a recommendation.  Over and over we’re finding prospect customers not only are overpaying for supply, but often excessively overpaying for both electric and natural gas.  Many suppliers take advantage of uninformed consumers by letting their fixed rate contract end so they can make even more money on billing an unattractive monthly variable rate.  We are finding we can save many of these prospects thousands of dollars each year.  Plus, we work extremely hard so our clients never fall onto a high monthly variable rate.   If you know other business owners or energy decision makers that you think may benefit from an energy bill audit by RD Energy, please feel free to pass along our contact information to them.  We’d be happy to audit their bills and provide a recommendation.  Plus if they end up saving on their energy costs, they will highly appreciate you!

Better Pricing For Your Home

As we head into winter we would like to remind you of  www.rdenergypricechoice.com.  This is a one stop shop for electric and natural gas shopping for your home.  We don’t advertise it much, but we created it for our clients and their employees who often ask if we can help them with their electric and natural gas bills at home.  It’s really simple to use.  Have a copy of your bill in front of you, put in your zip code on the online site and available prices show up.  If you see something your like, then the enrollment process can be done right then and there and will only take a few minutes.  If questions come up, call or send us an email.

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