EIA forecasts the Henry Hub spot price to average $2.45/MMBtu in 2020, down $0.14/MMBtu from the 2019 average. And, with an expedited closure of Aliso Canyon looming, CA facilities should reassess their risk tolerance sooner than later.
EIA forecasts that annual U.S. dry natural gas production will average 92.1 Bcf/d in 2019, up 10% from 2018. Production is expected to grow less in 2020.
As winter nears and conditions remain favorable relative to this time last year, consider a +30% hedge heading into 2020.
Persistent oversupply is forecasted to drive the 2020 national average price of Henry Hub to lows not seen in decades.
Keeping with recent trends, natural gas production records continue to be the biggest market driver.
With production hovering around all-time highs and temperatures remaining neutral, prices are appearing quite favorable.
In California, consider hedging through summer and winter seasons. Otherwise, look for price stabilization and opportunities for mixed Index/fixed strategies.
In California, consider hedging through summer and winter seasons. Otherwise, look for price stabilization and opportunities for mixed Index/fixed strategies.
National energy markets remain stable thanks to ample supply and peak production expected; California remains the exception.
After record demand caused by wild weather, the warming spring months promise a bit of reprieve as demand and supply move toward equilibrium. For now, upward pricing pressures are moderated by production quantities.