Energy Procurement Market Update – June, 2017
Better late than never, Energy procurement patience will be rewarded!
May, 2017 proved to be one of the coolest on record and energy procurement felt it. This unusual weather pattern supported the natural gas market early in the month and the mid-month three day heat wave raised some fears of an early start to summer which would all but eliminate the chances of a spring market retreat.
Thankfully there is still time to tune up the old AC system. The return of more April like weather and forecasts for a cool first two weeks of June have finally cracked the armor of what was beginning to feel like a spring board for the natural gas market.
The wait is over!
The anticipated and almost written off spring inventory sale is here at last! The recent Goldilocks weather, along with a trend reversal in production has broken the three month rally. Natural gas prices are below the $3 level for the first time since early winter.
Both power and natural gas contract pricing have begun to respond to the change. The physiological breach of the $3 level in natural gas should open the window for some softness in the shorter-term power and natural gas strips.
Capitalize on the market
For those that heeded our advice and did not chase the market higher your reward has arrived! Use this correction to lock in extremely attractive rates prior to the eventual start of summer.
Fixed power pricing has a chance to revisit multi-decade lows! Attractive long term fixed-options are readily available for all businesses. For larger load profiles, current market conditions warrant considering a partially hedge indexed strategy that can provide increases savings along with budget protection.
Going forward, all eyes will be on the pace of the natural gas inventory build and the possibility of extending the over supplied market condition for another year.