Now is the time to buy or refinance energy at reduced rates. Historically speaking, the lowest energy rates are produced between the beginning of January until mid-February. Rates are discounted nearly 3X from Summer highs and 20% since mid-December.
Why are the rates so low?
Good weather was the driver of the drop, but this is now priced in with little likelihood of even warmer weather driving rates down further. There is a large price increase factor looming; The Freeport LNG plant will begin exporting gas soon, which will shrink supply and drive the market up. We expect this to take place in late January or early February.
Lastly, the largest driver of electric pricing is the cost of its main fuel source: Natural Gas (Currently $3). This chart depicts the cost of natural gas over the past 3.5 years.While we currently stand $1 or so away from the historic low, we are $7 from the ceiling. There is not much room to fall meaningfully downward, but there is huge upside risk. Don’t gamble $7 to win $1.