While geopolitical events have been the primary focus of natural gas markets this year, weather predictions are now front and center as we look ahead to the fall and winter seasons.
Production and Storage Remain Relatively Steady
First, some news from the August 11 release of the EIA’s weekly update.
The average total supply of natural gas in the US fell by 0.1% compared to the previous week, while demand increased by 2.7% compared to the previous week. The increased demand was fueled in part by above-normal temperatures in the Northeast, which increased the demand for power generation. Additionally, working storage continues to be 12% lower than the 5-year average, making us more vulnerable to weather-related events. Active Hurricane Season Predicted
The National Oceanic and Atmospheric Administration (NOAA) is predicting an above-normal hurricane season, including 3-5 major hurricanes this season, according to its recent midseason update
. (Hurricane season is June through November, although the busiest times tend to be August, September and October.) Hurricanes and tropical storms can disrupt natural gas production and transportation, particularly in the Gulf Coast region, which is a major hub for the production, refining, and processing of natural gas in the US.
Winter Forecast: Mixed Signals
Each winter we see the impact of cold weather on our natural gas bills, and the coming season has the potential for additional exposure. While NOAA
is predicting an average winter for the Rockies and Midwest, the Farmers’ Almanac
is forecasting an early winter with lots of snow and record-breaking cold temperatures. Regardless of what weather source you use, the only predictable thing about winter is that anything can happen.
Weather Is Unpredictable, Now Is the Time to Plan Ahead
While the weather forecasts are only predictions, you can take steps now to protect yourself from unexpected events and price spikes. Contact your sales representative today to learn more about the options available to you from WoodRiver Energy.