Pullback During Fall Shoulder Period a Long-Term Buying Opportunity for Natural Gas?
Energy News Update: 27 November, 2023 Pullback During Fall Shoulder Period a Long-Term Buying Opportunity for Natural Gas? In our
Energy News Update: 27 November, 2023 Pullback During Fall Shoulder Period a Long-Term Buying Opportunity for Natural Gas? In our
Energy News Update: 27 November, 2023
In our April 10th Energy Update we pointed out since 2000 Natural Gas had been above where it was on April 10th, 96% of the time:
Therefore, it was not surprising Natural Gas trended higher since April 10th, but it has recently declined during the Fall Shoulder Period.
Natural Gas tends to decline into the Spring and Fall Shoulder Periods when demand is low between the summer heating and winter cooling periods.
Today’s report will explain why we believe this year’s decline into its Fall Shoulder Period is offering anyone with energy agreements expiring in the next 24 months an excellent opportunity to secure a fixed rate.
After reading our Apr 10th Energy Update those who heeded our warning rates were likely heading higher long-term and secured a fixed rate nailed the lowest rates of the year. But with that being said, please don’t despair that you have missed a major opportunity. From a long-term perspective, this cycle of higher Natural Gas prices is likely still in its early stages with higher prices still ahead:
Since 2000, the 4 times Natural Gas declined to where it was in 2023, the average price was always much higher for extended periods of time, and in the last 3 instances, after reaching its Spring Low, Natural Gas trended higher before pulling back to a Fall low above its Spring low, and most importantly the average price was always higher over the next 24 months:
Although it is possible, Natural Gas could go a little lower, as you can see in the next chart, the upside risk is far greater than the downside reward potential.
Therefore, if you have not already hedged your cost of Natural Gas or Electricity, we recommend taking advantage of this year’s decline into the Fall Shoulder period as an opportunity to protect yourself against the risk of higher Natural Gas and Electricity prices long term. Our hope is this report helps you understand why we believe the upside risk is too great to justify waiting hoping for slightly lower prices.
Not every client’s risk tolerance and hedging strategy are the same, but the above report will help you put into perspective the risk/reward opportunities. 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
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
