Business Electricity Market Still Looking Soft

Business Electricity Market Still Looking Soft

Business Electricity
After natural gas closed last week just above the $4 mark, Monday has seen an $.18 cent drop in the prompt contract. Thus, business electricity prices continue to trade sideways. The short term market outlook is rather soft as you consider the fundamentals. The potential impact of tropical weather is fading fast as the predicted frenzy of storms never materialized. Initial predictions were that nearly 60 BCF would get shut in due to weather, but the actual impact has only been 7.9 BCF.

Cooling demand is tapering off, and we are entering the shoulder months where demand will moderate until heating demand kicks in. U.S. natural gas drilling rig count is up, and stockpiles were loaded with 103 BCF last week, which was the largest injection for that week since 2006.

Bottom-line… the opportunity for commercial electricity users to lock in while the market skips off the bottom persists.


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