Summary: Just one year ago, natural gas prices were trading at their lowest levels in 25 years, and it is difficult to exaggerate the extreme turnaround experienced since then. Although few in the market could have predicted the extent that natural gas prices would escalate over the summer period, Gelber & Associates’ fundamental expectations since our April 2021 Forecast have largely held together. The most obvious change in the market since G&A’s April forecast release is what has occurred to gas prices and the forward curve. 

The story of how prices have outdone G&A’s generally bullish expectations to reach their highest levels since 2013-14 is not a simple one, but here are a few factors that behaved slightly differently than expected or newly materialized to help get the market to where it is today: 

• Bullish, hotter than normal summer weather 

• Relatively low renewable generation and limited gas-to-coal fuel switching capacity 

• Persistent storage deficit (including 51 Bcf base-gas storage reclassification in the Pacific region)

• Disruptions from Hurricane Ida 

• International price squeeze and record U.S. exports 

• Environmental, Social, and Governance issues causing diminished fossil fuel investment 

• Supply chain disruptions and general inflationary pressure 

Need to know where natural gas prices will be in 2022? Don’t just trust the forward curve. Read our latest forecast and hear from our 30 year experts.