What To Expect For Electric And Natural Gas Rates?
Back in our February column, we shared that natural gas futures during the summer were unusually high when compared to averages and that Hedge funds technicals’ had a bias for higher prices. Well, the Henry Hub in February was trading at $2.60/Dth and spring forward to October 4th, it settled at $5.80! Let’s not blame just the Hedge funds because a litany of factors resulted in the increase:
Increased worldwide demand for natural gas. Pent-up demand caused by the pandemic.
Europe’s reliance on gas versus wind to generate electricity because of a lack of wind power.
Domestic and foreign natural gas producers keeping supply flat.
Geopolitical initiatives towards green initiatives causing traders to increase positions in natural gas.
So as part 2, what to expect for Electric and Natural Gas rates for early 2022? As a broker that works with the same suppliers that supply utilities and our canvassing of Public Utility Filings, here are the electric forecasted and filed rates for this winter. The impact is significant with levels last seen in 2015. As for natural gas, the table below shows the November 2021 rate along with the utility’s 5 year average as a comparison.
It is important to note that utility rates can change on a monthly basis based on market conditions. The Algonquin City Gate (landed gas price in New England) futures for December/January/February indicate that it will likely go higher with relief expected in March.
Despite these higher rates, there are ‘sweet spots’ available for those seeking a refuge or planning renewals in 2022.
Neighborhood Energy is here to help steer you and your business in the right direction.
Your Friendly Neighborhood Energy!