Energy Market Update: May 16, 2016

How will delayed pipeline projects and a hot summer forecast affect prices? 

In the latest Energy Market Update, Tim Bigler — Direct Energy Business Energy Advisor — overviews current NYMEX commodity prices and discusses a range of factors that could drive up oil and natural gas prices. 

Watch the video below to learn more. 

NYMEX Commodity Prices

The spread between the 2017 and 2021 price strips has collapsed from about 70 cents to 25 cents. Waiting for further declines may not yield the same results as it has in the past. 

Proposed Pipeline Projects

The growth in natural gas production has largely been driven by pipeline expansion projects. Delayed or cancelled projects translates to less capacity which, in turn, could mean less production and higher prices. 

Hot Summer Forecast

The National Weather Service (NWS) is forecasting a hot summer across the United States. Warmer temperatures generally lead to an increase in electricity demand, which means more oil and natural gas could be used in power generation, resulting in higher prices.