Prices Jump on Colder Weather. Is this the start of a market run? The Beacon, 1/11/2021

The Headline:   Natural Gas prices rose on colder weather and an EIA forecast of higher winter usage, pulling electricity prices up as well.   Prices are still low, but this may be the start of an expensive winter and spring.     

The Bottom Line:    Prices for gas delivered in 2021 and early 2022 went up last week, pulling wholesale electricity prices up.   Prices are still attractive, especially on the longer-term lengths - the 60-month term trading at only 11% above the 10-year low.  Low drilling rig counts saw a big increase, but are still only roughly half of last year’s count.  The market is worried about polar vortex talk and the new EIA forecast – there may not be enough sources of supply if demand goes up on cold weather, and prices may rise because of it.  Lighthouse recommends locking in your electricity and natural gas rates to lock in savings before that happens.       

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