Weekly Energy Market Update

The Fundamentals

Weekly Natural Gas Report

The Energy Information Administration (EIA) reported a withdrawal of 81 Bcf out of underground storage for the week ending February 24. Inventories are 2,114 Bcf; gas inventories are 19% greater than the five year average and 27% greater than the same time last year.  For the week ending February 21, Baker Hughes reports 151 natural gas rigs in operation, unchanged from the prior week.  Crude oil rigs were reported at 600, down seven for the same period.

Weekly Power Report

Forward prices were up in all regions week over week. PJM saw price increases of 6.3%-6.8%, ISONE 5.3% and NYISO up 4.1%.

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.

Natural Gas Should be at Record Lows

Remembering all the way back to Economics 101, we know the first items of interest in making sense of any price are supply and demand. How much gas we have stored nationally is one of the most influential factors to the supply side of the equation. With the delay in reopening of a major LNG export terminal and a near perfect fall weather scenario, natural gas storage levels have gone from historically low levels to just below average levels. Hidden in the numbers is with normal weather and LNG exports, the U.S. would be at record low levels of storage. Since natural gas is used as the primary generation source for power, the risk of future low levels of storage will likely translate to natural gas and power prices continuing with the recent historical high volatility.

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 at 5X domestic prices (conservatively). In this situation, coupled with low storage levels, domestic natural gas prices would increase exponentially.

Production Hitting a Ceiling

Now we turn our attention to the supply piece of the equation. With producers becoming more fiscally minded, labor and material costs rising, investment in carbon being unpopular, and new pipelines being delayed due to politics. Production is expected to have only a minimal increase in 2023 and beyond.

In Summary – Why Buy Now 

There is a very real risk that prices could move higher this winter/spring due to stagnant supply and increasing demand. With the market at 12-month lows, 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

By working with an experiencing BOX energy broker, you can choose the solution that gets you the best deal while also satisfying your energy needs and specifications. 

Broker Online Exchange has a powerful network of over 90 suppliers throughout all deregulated markets. Our Brokers have instant access to over a million price points, as well as the ability to custom price any load size or shape. Our complimentary rate analysis service enables your BOX Broker to assess your energy spend. Your BOX Broker can procure the supplier, product, and rate that best fits your needs, while also saving you money.

Get connected with an experienced BOX Energy Broker today to take control of your business’ energy costs and start saving money.