Natural gas prices are unlike to move down significantly for remainder of 2014 and early 2015, according to EMEX, LLC, a leading technology firm in energy sector.EMEX’s analysis, based on current market fundamentals including current storage levels, historical injection patterns and rig counts, finds that NYMEX Natural Gas monthly settlement prices are likely to return to at least 2010-2011 calendar year levels, which were between $4.10-$4.40/MMBtu. This is a significant reversal from where natural gas prices have been over the past 2 years, where prices averaged less than $3.25/MMBtu.

"With the significant changes we have seen in the market, we think it is important to keep our clients informed about the latest market conditions,” explained EMEX CEO Todd Segmond. “As one of the largest energy consulting firms in the nation, providing this information to our clients allows them to make informed decisions about managing their natural gas and ultimately electricity energy price risk."

Natural gas prices shot up this winter due to the Polar Vortex which put the major population centers in a deep freeze for extended periods of time. As a result, more natural gas was used this winter than at any time in the past 20 years.

"With natural gas storage levels significantly below historical norms and a slow start to the injection season, current market conditions point towards natural gas trading over $4.50/MMBtu for the balance of the year,” said Phillip T. Golden, Director of Risk and Product Management at EMEX. “Unless we see record injection levels, we are going to head into the Winter of 2014 with less natural gas in storage than any time since at least 2008. Our analysis suggests that storage is likely to reach barely 3,000 BCF by the start of November, which is roughly 30% below the historic highs we saw in 2012 and 25% below where we were last year."

With current market fundamentals pointing to higher prices, end-use customers need to be prepared for both higher natural gas and electricity prices. While market conditions are constantly changing, EMEX’s detailed analysis points towards a bullish energy market for the next 12-36 months.
Source: EMEX, LLC