- Moving from a very cool June to a much warmer July
- Weak June demand resulted in very strong June storage injections
- Warmer temperatures + increasing exports = much higher July natural gas demand
- How hot will the Midwest get this summer????
While June 2018 was very hot, June 2019 in the Midwest was the coolest and wettest in 10 years. As a result the NYMEX gas prices, and in direct correlation, electric wholesale prices fell to the lowest point in years. Actually, power prices for the years 2021-2023 have never traded lower! While last summer the country saw higher and new weekly record natural gas production levels through most of the summer, it seems that production at least for now has peaked and is slightly off expectations. However, production is still very strong so even though June was cooler than normal June 2019 natural gas storage injections were much higher than they were last June. As we enter July, the temperatures in the Midwest and Northeast are flipping to above normal and with it the rapid rise of natural gas and power demand. The week of July 4th will see a big late week demand drop off as much of the industrial sector shuts down for the holiday. Starting the week after, the industrial demand and increasing LNG export demand will combine with above normal temperatures that will likely push prices to a higher level. What we will likely see during the rest of 2019 is more price volatility as natural gas production stays mostly flat while natural gas and power demand fluctuates between times of high and low usage.
Many Buyers and business decision makers often wait and decide on a new natural gas and electric rate contract 30 – 60 days prior to their contract end date. The electric and natural gas wholesale price volatility that seems to be happening more in 2019 is sending us all the message that making an energy buy should be based more on market opportunities. It’s better to be more strategic and buy when the market is experiencing a price dip rather than a particular point in time purchase. As your energy partner RD Energy watches price trends and watches your contract end dates so we can communicate buying opportunities often found well in advance of your current contract end date. Please contact us if you’d like to discuss your current natural gas and electric contracts to explore what opportunities might exist for your business.