The July 2020 NYMEX Natural Gas contract settled at $1.495. On Thursday, June 25, 2020, the NYMEX closed at $1.482/MMBtu. This is the lowest closing price in 25 years! This downturn in natural gas pricing is being attributed to weak global demand for LNG. However, there are hopes that the global demand for LNG will rebound as the coronavirus shutdowns in many countries are relaxed and their economies begin to grow.
Weather forecasts are indicating a mild start to the summer. Also, last Thursday’s natural gas storage report which showed a much larger than expected storage injection of 120 BCF into inventory, which translates to an 18% surplus to the 5 year average. Remember, power prices tend to follow natural gas prices!
With many companies developing a strategy to rebound from Covid-19, we strongly recommend discussing your energy supply strategy with an Energy Consultant as soon as possible.