Energy Market Update: May 3, 2018

How do oil prices impact energy?

In this week’s Energy Market Update, Direct Energy Business Strategist, Tim Bigler, talks about the impact of rising oil prices on electricity and natural gas.

Watch the video below to learn more.

High Oil Prices and “Associated” Natural Gas Production

In the Permian Region, oil prices are rising, as is the price of production. And that leads to rising prices in natural gas production.

In the Appalachia Region, production of oil is low, but production of natural gas and natural gas liquids is high.

Q1 2019 NEEPOOL Energy Prices – Oil/Gas Impact

 In New England, Algonquin Fixed prices have risen slightly. CME ULSD prices are moving upward, though not as dramatically. And power for NEEPOOL Peak has been rising – at least in part because of high oil prices.

Conclusion

If you rely on dual fuel or oil units, and you’re wondering why power prices are moving up, but natural gas less so, oil may be to blame.

The good news is that higher oil prices lead to higher oil production. With such exports, that’s a gross domestic product uplift, while natural gas prices stay relatively low.

Stay tuned to the Direct Energy Business Blog for the latest market news and information.

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