In California, consider hedging through summer and winter seasons. Otherwise, look for price stabilization and opportunities for mixed Index/fixed strategies.
After record demand caused by wild weather, the warming spring months promise a bit of reprieve as demand and supply move toward equilibrium. For now, upward pricing pressures are moderated by production quantities.
EIA forecasts that annual U.S. dry natural gas production will average 92.1 Bcf/d in 2019, up 10% from 2018. Production is expected to grow less in 2020.
Direct Access is the program in PG&E, SCE, and SDG&E territories that allows commercial customers to procure electricity from a competitive supplier rather than the utility.
Despite low storage levels, the EIA expects strong growth in U.S. natural gas production to put downward pressure on prices in 2019. Meanwhile, a warm winter forecast through the New Year is keeping price hikes at bay in the short term.
A perfect storm of 15-year low inventories and cold temperatures have created price rallies that hit four-year highs – all while production records continue to be hit.
