Price Increases on the Horizon: The Beacon, 07/27/2020

The Headline:    Energy prices for the next few months went up last week due to warmer weather and tropical activity in the Gulf.   Prices for energy in 2023 and beyond also went up due to concerns about low drilling rig counts and the likelihood of increased demand.

Energy prices went up for the front end of the curve, but the back end of the curve after 2023 also went up a similar amount – that is unusual.     The front-end increase is likely based on warm weather and tropical weather in the Gulf.    The back-end increase is of greater concern – low rig counts, demand that is expected to bounce back after COVID-19 driven decreases, and increasing uncertainty about future events appear to be pushing rates up.   Locking in rates now for as long as possible is recommended.  

The Bottom Line:    Locking in a rate this week will prevent further price increases – get your contract in place and look for ways to lower your energy consumption by calling Lighthouse.

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