Energy Market Update Electric and Natural Gas Prices are on the rise.
Winter is finally here!
The arrival of cold winter weather patterns across the key natural gas heating regions combined with lagging production has triggered a volatile spike in both natural gas and electric prices.
NYMEX natural gas futures prices have rallied from the November close of $2.76 to $3.69 following yesterday’s inventory report of a 42BCF. This compares with the Dec 2015 NYMEX settlement of just above $2.20.
The current level of volatility in both Natural gas and electricity markets hasn’t been seen since the Polar Vortex winter of 2014-15. The good news is the volatility has been confined to the current strips and the future strips have remained relatively stable.
This should not be a call to panic, however it is a shot across the bow for those that continue to be complacent to reconsider longer term hedges to take advantage of the unsustainable multi decade low price environment in both commodities.
For those that are not currently hedged, prepare for moderate hit to your December budget and look for an eventual pull back opportunity to possibly buy some short term protection and look to put a longer term strategy with a spring 2017 start.
If you have any questions or would like a no cost review of your current and future energy management strategies please call NJGEC at 973-287-7797.
The professionals at NJGEC are continually monitoring the energy markets and are readily available to address your immediate and future energy management needs.