Energy Solutions, Inc. - Natural Gas Prices Expected to Fall to Significant Low Near Labor Day

In its most recent weekly edition of The Advisor, Energy Solutions, Inc. advises buyers to begin preparing for a significant natural gas buying opportunity that it expects to surface around the Labor Day Holiday.  “Lingering heat in the eastern half of the nation has reduced storage injections substantially over the past three weeks,” says Valerie Wood, President of Energy Solutions, Inc.  “However, the supply situation continues to look better each month as producers have are not reducing drilling efforts in the prolific Haynesville, Eagle Ford, and Marcellus Shale regions.”

Wood explains that contrary to what many expected, producers are still making reasonable profits by drilling for natural gas even though the spot price of natural gas in Louisiana has fallen to below $4.50 per MMBtu.  “The solution for producers has been NGLs,” says Wood.  “NGLs or natural gas liquids, which include propane, butane and ethane, are a byproduct of natural gas production and are stripped away from the natural gas and sold separately.  NGLs are priced more closely to crude oil commodities so in some cases this helps the producer to reap a sale price of closer to $7 per MMBtu.”

While supplies are more than ample at this time, Wood also points out that buyers should still be proactive hedgers during the first and third quarters as seasonally this is the timeframe when natural gas prices tend to dip toward significant lows.

The Advisor is a weekly and natural gas publication specifically designed for businesses who want to manage and reduce their natural gas expenditures.  “Remember, knowledge is power,” says Wood.