Energy News: February 3rd, 2025 The EIA’s Latest Weekly Storage Report Continues to Support Higher Natural Gas Prices Long-Term https://youtu.be/BaPoRCeSO5c
Energy News: February 3rd, 2025
Natural Gas is the largest power source for electricity generation; therefore, its pricing is highly correlated, which is why we focus on Natural Gas in our reports.
In our Jan 13th Winter Update, we said last year we finished the winter heating season with supplies nearly 700 Bcf above the 5-year moving average, which is why prices declined to near their lowest level since 2000.
The $1.52 low reached at the end of last year’s winter heating season was only surpassed by the extraordinary $1.44 low reached at the height of the Covid pandemic.
In our Jan 13th Winter Update, we pointed out demand is expected to outpace supplies for an extended period, which will support higher prices similar to what has happened since 2000 when prices were as low as 2024, the average price was always higher long-term:
Our premise demand is expected to outpace supply was confirmed by the EIA’s latest weekly storage report, revealing supplies have declined from nearly 700 Bcf above the 5-year moving average at the end of last year’s winter heating season to 111 Bcf below the 5-year moving average.
The massive decline of 800 Bcf over the last 10 months will likely continue to grow due to surging domestic electricity demand to accommodate the explosion of data centers, electric vehicles needing to be connected to the grid, and exports expected to rise for the foreseeable future.
But it is important to understand periodically prices will decline, which will offer good buying opportunities.
Mild weather over the last week has triggered a short-term Natural Gas decline:
But the cool weather forecasted for this month could trigger the next increase in prices:
In our last report, we said you should expect high volatility, and the risk of higher prices will continue to increase, which is why we recommend anyone with agreements expiring within the next 18 months take advantage of short-term declines like we have experienced over the last week to reserve Natural Gas and Electricity to be available when their present agreements expire.
Not every client’s risk tolerance and hedging strategy are the same, the goal of our reports is to reveal your risk/reward opportunities. We invite you to call one of our energy analysts to help plan a hedging strategy appropriate for your situation.
Ray Franklin
Energy Professionals
Senior Commodity Analyst
Energy Professionals is committed to finding its customers the best possible rates on electricity and natural gas. Tell us your location and service type and our energy manager will connect you to the most competitive offers.
Switching to an alternate supplier is easy. There is no chance of service disruption, and you'll continue with your current utility for energy delivery and emergency service. Take a few minutes to discover your best offers, and enjoy the benefits of retail energy in your home or business.
1. Energy Type
2. Service Type
3. Zip Code
We believe that knowledge is power. Here’s a free e-book that provides business solutions to reducing energy costs.
Download E-Book Free Energy Audit
