No Deal with Iran. Will Gas Rates Go Up?
A deal has yet to be sealed between the US and Iran to wrap up the conflict and the Strait of Hormuz closing. In the US, we have already seen the impacts at the pump. But, looking ahead, how will this all affect natural gas rates? With 20% of the global supply going through the strait, local natural gas rates in Georgia may eventually get hit. But how will the Iran conflict affect natural gas rates in GA? Let’s look at the factors and find out.
Iran Conflict Prompts More Gas Exports
In the US, we don’t import much natural gas at all. That means the Strait of Hormuz closure doesn’t affect our supply too much directly. Currently, wholesale natural gas spot prices have dropped steadily this month. After a warmer than average winter and early spring, demand has been low. This pushes U.S. storage amounts higher and prices go lower.
However, gas supply to many countries in Europe has been cut off due to the conflict with Iran. Recently, the U.S. has increased natural gas exports to these countries to help stabilize their supply. As a result, this has begun affecting natural gas storage and rates in Georgia, all the way down to local natural gas suppliers.
Specifically, Elba Island LNG export terminal got the green light to increase exports by 22%. This facility is near Savannah, Georgia and exports from gas fields in Alabama, Louisiana, Texas, and Mississippi. In Georgia, we get most of our natural gas through pipelines from Alabama. But because there’s only so much pipeline space for this gas, diverting more of it to Elba for export could make shopping cheap natural gas plans harder.
Other Factors Affecting Natural Gas Rates in GA
Predictions for this summer will be hot in Georgia. In fact, this looks like it’s the case for the whole south. Although we don’t use much natural gas in our homes during the summer, most of our electricity comes from natural gas. So, that means demand for natural gas will be high throughout the summer just from domestic use as well.
How to Save on Natural Gas Plans
Due to the conflict this spring, we didn’t see lower shoulder month rates. With higher storage and dropping spot prices, that could change in May. But things are still unpredictable with the Strait of Hormuz and forecasts of a hot summer. Still, we expect summer rates may likely be a bit higher than average. Furthermore, fall rates may not be likely to drop much, either. But anything can happen.
So, how can you save on natural gas? Locking-in a cheap fixed rate natural gas plan today could be a good bet. Even though rates didn’t drop much for spring, it looks like things will only get more expensive. On the other hand, you could opt for a super cheap introductory variable rate plan. This can be a good option if your summer natural gas use is practically nothing because the high variable rate won’t hit you as hard.
Choose the best option for you! Find your next plan today at https://www.georgiagassavings.com.