Weekly Energy Market Update
Weekly Natural Gas Report
The Energy Information Administration (EIA) reported an injection of 74 Bcf into underground storage for the week ending October 20, 2023. Inventories are 3,700 Bcf; gas inventories are 183 Bcf greater than the five-year average and 313 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 real risk that prices could move higher this fall due to decreasing supply and increasing demand. With the market near 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.