Energy prices have traded in a tight range over the last two weeks. From Friday, October 4, 2019 to Friday, October 18, 2019, natural gas prices in the forward 12 months fell by 1%, and electricity prices in the forward 12 months fell by 1/2%.
The market prices are currently trading sideways because the industry is transitioning from the low demand month of October into the peak demand months of winter. October is like the calm before the storm. However, cold air is on our doorstep. The heaters have started to come on. Are we ready for winter?
Despite the fact that gas exports are setting record highs, and U.S. power plants are burning record amounts of natural gas, the gas industry looks very well prepared for this winter’s heating demands. The traders are showing no fear because natural gas production is flowing at a record high level for the second year in a row. Gas production in 2019 is 11% higher than the record high production we enjoyed in 2018.