Good news on prices, but potential trouble on the horizon. The Beacon, 01/25/2021

The Headline:   Natural Gas prices for 2021 and 2022 dropped last week, but rose slightly for the years after that.   Electricity prices should improve on the shorter terms. Gas storage levels dropped closer to the 5-year average, suggesting higher prices may be on their way.      

The Bottom Line:    Prices for gas went down sharply in 2021, and went down in smaller measure in 2022.   After 2022, prices went up slightly through the end of the curve in 2033.   Prices are very attractive, especially on the longer terms - the 60-month term is trading at only 11% above the 10-year low.  Low drilling rig counts saw another increase, and are now above 550 for the first time since April 2020, but are still at only 53% of last year’s count.  Dropping storage levels are not good news for energy users – barring more rigs in the field and warmer weather through the end of the winter, we may be in for higher prices soon.  We recommend locking in your electricity and natural gas rates ASAP.       

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