As the U.S enters the natural gas injection season, short-term (12-month) contracts continue to carry a premium thanks to lackluster production and less than ideal storage.
With production falling and storage near the five-year low, short-term gas deals are likely to carry a premium. Work with an objective expert like Ecom-Energy to get the most competitive prices available.
At its highest point, approximately 48.6% of the Electric Reliability Council of Texas’ (ERCOT’s) power generation was forced out due to extreme weather conditions. This caused a critical supply shortage just as demand ramped up, creating emergency conditions that forced the grid operator to initiate rolling outages throughout the week of February 15.
Most fundamentals for natural gas pricing are bullish. There is little keeping natural gas bearish for the future unless massive increases in production and reduced electricity demand are realized.
An abundance of natural gas in storage with moderate production means weather will be the primary pricing driver as summer wears on. July is expected to be warmer than average for most of the U.S.
COVID-19 and the collapse of oil prices have reduced both supply and demand for natural gas. Price rallies and volatility have materialized, though not to the degree some would expect.
