Factors Come Together for Higher Winter Gas Prices
Waiting until winter to shop for natural gas plans? That might not be the best plan. Here in Georgia, we don’t use much natural gas in fall. So, it’s understandable not everyone is thinking about it right now. However, saving the most money on natural gas this winter means checking rates and projections in fall. In fall, we can see shoulder month prices, where low demand drives rates down. But, natural gas heat costs are predicted to rise this winter. So, let’s dig into the details!
How Winter Raises Natural Gas Rates
According to the NOAA, there’s a 71% chance of La Niña this fall. For Georgia, La Niña means warmer and drier weather. But for northern states, it means colder and wetter weather. In that scenario, Georgians may not use as much natural gas for heat, but other states will so prices tend to go up. Later winter projections for La Niña are only 54%. Nevertheless, cold snaps can still lead to volatile natural gas prices. Typically, natural gas rates go up in winter. But with more extreme weather, the jump up could be even more.
Natural Gas Exports Play a Role
Over the past 10 years, the US increased exports of liquified natural gas steadily, according to EIA. Our natural gas production went up along with this export trend, too. However, in the last few years, the EIA suggests that increasing exports are a big reason for natural gas price increases. Any natural gas shipped overseas means we have less in our stores to meet demand. This can be especially costly when there are sudden spikes in demand, like a cold snap. Specifically, when energy stores go down suddenly in cold weather, that change reverberates through the wholesale market and rates from natural gas suppliers can soar.
Electricity Use Affects Winter Natural Gas Rates
In the past few years, the surge in AI and data storage needs has changed electric use in the US. According to MIT, from 2022-2026, energy use from the data centers will double. By 2030, the demand could be 21% of global energy use. This is a massive amount of energy. On top of that, more than 40% of our natural gas use goes towards electricity generation. All together, this means a dramatic increase on demand for natural gas which, in turn, drives prices up.
Overall, gas prices are on their way up in the next few months. The EIA expects a significant increase by January. So, grabbing a cheap natural gas rate as soon as possible will likely save you money as opposed to getting a plan later in the year.
You can start now by comparing available plans at https://www.georgiagassavings.com.