Energy Update | April 18th, 2019

Energy Update Apr 18th, 2019   Low Demand for Natural Gas During Spring Shoulder Triggers Decline to Long-Term Support!  

Energy Update
Apr 18th, 2019

 

Low Demand for Natural Gas During Spring Shoulder Triggers Decline to Long-Term Support!

 

In my Feb 25th Energy Update, I explained why it was not surprising Natural Gas held above long-term support near $2.50 per MMBtu, but recent price action might be signaling Natural Gas could trade below long-term support for a short period of time and if it did it would insure much higher prices for an extended period of time.

 

 

As you can see in the above chart mild weather in April triggered a decline to long-term support near $2.50 per MMbtu. The demand for Gas and Electricity always decline in the spring and fall prior to increasing again during the summer cooling and winter heating seasons. Over the years prices near cyclical and historical lows during “Shoulder Periods” are excellent buying opportunities and although it is possible prices could decline marginally from present levels, I recommend anyone with agreements expiring within the next 18-months not delay hoping for lower prices, and reserve energy at today’s very low prices to be available when their present agreements expire. The upside risk is too great to justify waiting for slightly lower prices.

Not every client’s risk tolerance and hedging strategy is the same, but the above report will help you put into perspective the risk/reward opportunities. I invite you to call one of our energy analysts to help you plan a hedging strategy appropriate for your situation.

 

Ray Franklin
Energy Professionals
Senior Commodity Analyst

Choose Your Energy Supplier

Energy Professionals is committed to finding its customers the best possible rates on electricity and natural gas. Tell us your location and service type and our energy manager will connect you to the most competitive offers.

Switching to an alternate supplier is easy. There is no chance of service disruption, and you'll continue with your current utility for energy delivery and emergency service. Take a few minutes to discover your best offers, and enjoy the benefits of retail energy in your home or business.

1. Energy Type

2. Service Type

3. Zip Code