Energy Update | January 3rd, 2019

Energy Update
Jan 3rd, 2018

Warmer Than Normal Temperatures Forecasted into Late January Cause Natural Gas Prices to Tumble Setting Up Excellent Near-Term Buying Opportunity!  

In my Dec 17^th Energy Update, I said Mild weather forecasted into early January caused prices to tumble from near $5.00 per MMbtu to $3.60 per MMbtu, but if colder than normal weather returned in January, Natural Gas prices would again likely skyrocket!

The good news is warmer than normal weather is now forecasted to continue into late January and as you can see in the chart below Natural Gas Prices have continued to collapse setting up an excellent near-term buying opportunity:

Weather will be the most important factor influencing Natural Gas and Electricity pricing over the next 2 months. We are presently experiencing a “January Thaw” throughout much of the United States, which is decreasing heating demand, but if as expected cold weather returns in February, prices will again likely move sharply higher; therefore, considering the recent high volatility, we recommend locking in rates now and not risk another potential rally.

Not every client’s risk tolerance and hedging strategy is the same, but we trust the above report will help you put into perspective the risk/reward opportunities now. I invite you to call one of our energy analysts to help you plan a hedging strategy appropriate for your situation.

Ray Franklin
Energy Professionals
Senior Commodity Analyst