As Winter Temps Go Down, Energy Prices Go Up – What to Do Now? The Beacon, 02/08/2021

The Headline:   Last week, cold weather drove natural gas prices up through 2022, but prices went down slightly down after that.  Short term electricity prices will be up this week, but the longer terms are still the best buy. Gas storage levels are holding between the 5-year average and the 5-year max, but worries persist that prices may continue to climb if cold weather persists.      

The Bottom Line:    With 2021 and Q1 2022 prices up materially based on colder short-term weather forecasts, and prices for the balance of 2022 up slightly, it appears that the market’s concerns about the risk of recent low rig counts are coming to pass.  The good news is that prices are slightly down after 2022, and the longer-term contracts are still very attractively priced.   The 60-month term is trading at 13% above the 10-year low.  Low drilling rig counts saw another small increase, and cold weather is expected for most of the country through the end of the week.  The market is still worried about rising prices through the remainder of the Winter and Spring, and we are still recommending that you lock in your electricity and natural gas rates ASAP.       

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