Energy News – April 2021
Spring weather is fast approaching, and it’s clear that, yet again, the nation is quickly experiencing changes. We hope that you and your loved ones remain safe and healthy. As vaccinations are happening at an increasing rate, and state economies start reopening, we would like to take a moment to reflect on what happened, what is happening, and what we expect to happen in the U.S. energy markets.
Short Term: February’s Cold Weather Has a Lasting Impact
February got a lot of attention due to Winter Storm Uri. The storm exposed a massive vulnerability in the overall U.S. energy infrastructure. More than 800 record low temperatures were set, driving up demand for natural gas as people tried to keep their homes warm, while catastrophic infrastructure impairments cut supply. Unfortunately, this created a perfect storm for prices to skyrocket from $2-3 per dekatherm (Dth) to $600-$1200 per Dth in the central U.S. and over $170 in the Rockies.
Since then, many investigations have commenced and are still ongoing. Most focusing on how the event happened, and how to prevent it in the future. Any conclusions have yet to be made. Utilities have started announcing natural gas rate increases in response to the commodity costs experienced during the storm. Some utilities have not finalized their rate increases, so we keep you updated when we hear more.
Long Term: Demand to Increase as Vaccine Deployment Grows
As states continue to reopen, the demand for oil and natural gas is quickly increasing, with production slowly making a return. This lag in production has caused an increase in prices, of which you have most recently probably noticed at the pumps. Further, according to the Energy Information Agency (EIA), March 2021 saw natural gas inventories two percent lower than the five-year average. This is due to the extremes of the 2020-21 winter that occurred in addition to lower natural gas production.
Going forward, it is important to remember, even though the energy market is always changing, 2020 and so far, 2021 have brought drastic changes to the market that will affect us all for many years to come. Coping with a global pandemic and record low demands to quickly dealing with one of the coldest winters on record stressed the supply, pricing, and infrastructure for natural gas in the U.S.
Please see below for further data on national and local gas market prices:
Market Data – April 2021
Weekly Natural Gas Storage
CME (Henry Hub) Natural Gas Futures $/Dth
Utility Costs of Gas/ Dth
|Month||MidAmerican – IA||Alliant – IA||Black Hills – NE||Black Hills- IA||Xcel Small Volume||Xcel Large Volume|
|April||$6.40||$6.14||$3.93||$4.55||Not released||Not released|
Local First of the Month Markets
|Month||NNG Ventura||Chicago Citygates||Colorado Interstate Gas|