A combination of winter weather and working from home (increased residential demand) have lifted prices to double their summer lows.

Coming months will be driven by lower domestic production, winter demand, and increasing LNG exports – causing price increases.

With many unknowns, facilities should reassess their risk tolerance to ensure it aligns with their procurement strategy.

An abundance of natural gas in storage with moderate production means weather will be the primary pricing driver as summer wears on. July is expected to be warmer than average for most of the U.S.

With well-stocked natural gas storage inventories, weather will be a primary pricing driver heading into the summer months.

COVID-19 and the collapse of oil prices have reduced both supply and demand for natural gas. Price rallies and volatility have materialized, though not to the degree some would expect.

Prices hit a low in March and have been trending upward; consider hedging 2021 positions as soon as possible to avoid further potential increases.

Winter 2019-2020 experienced the perfect storm of warmer than average temperatures, reduced consumption and demand due to weather and global events, and increased supply – resulting in historically low February prices.

After the second warmest November on record, nine of the ten weeks ending November 23 to January 25 were all “warmer” than normal, as recorded by Heating Degree Days.

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.