Weekly Energy Market Update
Weekly Natural Gas Report
Inventories of natural gas in underground storage for the week ending November 10 are 3,664 Bcf; a withdrawal of 55 Bcf was reported for the week ending December 8. Gas inventories are 260 Bcf greater than the five-year average and 254 Bcf greater than the same time last year.
Why Buy Now
Having trouble closing deals due to high rates? We’re here to provide you with the information you need to answer the recurring question; Why buy now?
We break down the answer to this question so you can come to the table with all the information you need to help your customer navigate these unprecedented market conditions.
Rig Count Drop Likely to Decrease Future Production
A drop in rig counts can have a significant impact on natural gas prices, primarily by affecting the supply-demand balance in the market. Rig counts serve as a crucial indicator of drilling activity and production levels in the natural gas sector. When the number of active drilling rigs declines, it suggests a slowdown in new exploration and extraction efforts, leading to a decrease in natural gas production. The decrease in production can result in a reduced overall supply of natural gas available in the market. The reduced supply coupled with expected increasing demand, creates a scenario where prices are likely to rise.
Natural Gas Exports are Soaring
With the loss of a major pipeline between Russia and Europe and Asia’s increasing demand, countries around the world are forced to source gas outside their boundaries, and the United States is the top new supplier. This provides U.S. producers with the opportunity to sell LNG gas overseas much higher than domestic prices. In this situation, coupled with low storage levels, domestic natural gas prices would increase significantly.
Higher Prices Are Always Just Around The Corner
One thing is certain with natural gas and electricity prices: when prices are low, much higher prices are just around the corner. Currently, natural gas prices are at the low end of the historical range. This means that if a customer is thinking of waiting to purchase their future electricity and natural gas needs, they might betaking a bigger risk, hoping for a small reward.
In Summary – Why Buy Now
There is a very high probability that prices could move higher this winter from decreasing supply and increasing demand. With the market at the lowest levels in over two years, right now is a great opportunity to take risk off the table and purchase all or a portion of their energy supply costs.
Lock In Your Energy Rates Now
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Get connected with an experienced BOX Energy Broker today to take control of your business’ energy costs and start saving money.