You’ll note NYMEX futures pricing remains virtually unchanged over last nine months, no problem. With summer coming to an end and winter heating season not too far away, we need to look at level of gas in storage come November 1st which is “unofficial” start of the heating season.
Current storage level is 20% below year-ago level and 19% below 5-year average.
For the all important Northeast Region (this directly affects us) we’re 14% and 13% below year-ago and 5-year averages, respectively. We likely will begin the heating season with storage levels at their lowest in over ten years. This is something to be concerned about at the start of winter however, with gas production continuing at record levels this should help meet peak winter demand.
A cautionary word on record production. Here in the Great Overtaxed Northeast, the decades old problem of our limited infrastructure being unable to deliver greater quantities of needed gas in cold snaps continues. You can have all the production you want but without adequate pipelines to deliver additional quantities, limited supply results and costs soar. Any prolonged cold snap will be costly and if you’re not locked in for both electricity and natural gas be prepared to pay very high prices.
Need to once again remind everyone of impending closure of Indian Point nuclear power plant in early 2021. This plant provides 25% of power for Westchester County and New York City, 10% of all power needed in New York state. This will be felt. Granted, some new replacement power is scheduled to come on line by 2021 however this will definitely result in volatile markets – prior to 2021.
Contact us to find out more.