
By Jeff Bolyard, Vice President, Commodity Strategy
Last year was a roller coaster for most of us and I, like most in my circles, am glad to be turning the calendar to another year. Economic start-ups and shutdowns combined with wild weather and overall uncertainty of supply and demand in 2020 and beyond has provided the gas market with unstable fundamental drivers which has translated into extreme price moves, especially in the spot market. This volatility is even more evident at the regional level, where specific supply and demand factors exacerbate the daily price of natural gas.
The chart below compares three common regional daily indices; Chicago City Gate (Orange), SoCal Gas City Gate (Blue) and Transco Zone 5 Del (Green), against the U.S. benchmark of Henry Hub, LA (Black).
This acute change in pricing, not only at the Hub but even more so at the regional level, places more risk on all entities that are buyers of this commodity. These topics should be discussed with your energy advisor to see if a change in purchase strategy is desired for the locations in which plant assets reside.
We believe that smart energy solutions start with a dialogue. Contact us today and let’s start the conversation about how Edison Energy can evaluate and mitigate risks while aligning energy investments with your company’s strategic goals.
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