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Why secure energy now? Potential savings and security… That’s why!

Monday, April 28, 2014 2:49 PM | Anonymous

1. Long-term value
• The natural gas and electric futures markets show long-term prices at a discount for many markets.

2. Change in risk-reward assessment
• The recent winter price volatility changes the risk outlook for future winters (and summers).
• Although a repeat of the extreme cold might be unlikely, the supply challenges in the market are the same and could be repeated. This could be worse due to numerous electric generator retirements.
• So waiting to lock in a long term price may not necessarily result in a reward.

3. Bullish long-term fundamentals for gas & power
• All of the following bullish factors remain: coal plant retirements, EPA regulations, LNG exports, Mexican exports, and industrial demand growth.

4. Storage deficit and gas generation
• Natural gas storage inventories are at their lowest levels since 2003 and injections must exceed historical averages by more than 4 Bcf per day to erase the current deficit.
• This has potential to absorb prolific shale gas production increases during 2014.
• If additional supply goes to storage, then prices must remain high to keep non-gas (coal) plants running. If not, gas will be consumed by generators rather than into storage.

5. Shift in market focus
• The market has been focused on 2014, but focus may shift to long-term into the spring which could increase volatility for 2015 and beyond.

We believe you will find these articles of interest

Natural gas storage

Extreme cold in January shocks some energy customers

Why gas price spikes are happening in New York and New Jersey

CONTACT INFORMA ENERGY TODAY. We’ll expedite all your natural gas & electric and LL84/87 needs!

Monica Grossbaum: (845)538-3000 and/or Lori Simon: (917)751-1845


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