An Opportunity to Think Ahead -- The Beacon, 10/12/2020

The Headline:   Natural Gas and electricity prices are up on the front end of the forward curve, pulling all of the strip prices up.  Storage numbers are at historical highs, drilling rigs are up again, and weather is largely warmer than normal.   We suggest locking in and getting out of the market if you are calendar-bound, but will switch to a hold recommendation if prices continue to increase.

The Bottom Line:    All of the prompt-start annual strips are up, but prices are still very attractive after 2021.   Natural gas in storage continues to set 5-year highs and appears like to set a record this fall.  Weather is largely warmer-than-normal, drilling rigs in the field had yet another good week, and the Gulf is quieter than it has been.  If you are in a contract that expires in the next 24 months, we recommend looking at rates – there is a good opportunity to take price risk off the table this week.   

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