What's Up With Natural Gas?

It's been awhile since commenting on the Natural Gas situation in the United States.

From the EIA.GOV...

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Clearly the swing in storage is upward and a bit ahead of the curve, yet still about 4% below this time last year, although at 12 Bcf above last November's lower range peak. Don't expect it to get anywhere near the higher range peak, as that ship has sailed. Literally... LNG exports.

Much has been written and said about heating costs for the United States this year... as in rising. 

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Just a quick glance at the chart would make one wonder how come prices are rising in the United States, when the October 2021 to October 2022 prices are very similar. I probably should have put the 7/1/2022 pricing in the chart. (Too lazy) [See edit at bottom of post.]

The bulk of the natural gas contracted during the summer of 2021 and by October 2021, was priced in the $4 range averages. The contract pricing for the similar period this year, was closer to $7.50. At one point it was near $10.

A lot of natural gas in storage was priced accordingly. This would indicate heating at 30% more than last year, as well as electricity, by maybe 15%. Going into the cold season, will financially strap a lot of people, in my opinion. Which the CPI states has already happened. But volume used becomes the issue

In Europe, the strain will be much worse, although various programs are being enacted in attempts to ease consumer stress. Not sure how they are working, but just a visual of European news... the consumers are becoming less and less happy.

I did do a bit of in depth research on U.K. energy and was able to match the same predictions that Ofgem came up with. At one point it was predicted, the average energy bill would be in a range of £3,600 ~ £5,400. To protect the consumer, a £2,500 cap was announced, with promises of government money to the energy companies to fill the gap.  That £2,500 was £500 above the previous cap. 

Amazing and thoughtful, until you run the same numbers based on current projections and get a range of £2,500~£3,600. It seems to be shifting from relief for the consumer, to a subsidy for the energy companies. But as the old adage goes, worry about your own issues and let others worry about theirs. Considering how thin skinned the Brits are in normal times... good advice, when they are raw.

Back to the U.S. We will likely pinpoint the drop in consumer spending for all things other than energy, about the time the energy bills roll in... after that first blast of cold air. I'm not a weatherman, but this will likely occur in the January/early February timeframe. 

Good luck!

Edited at 5PM on October 16th, 2022...

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