The first snowfall of the season brought more than a blast of cold air to New York City. It also brought some chilling news: natural gas price spiked by 18 percent on Wednesday before retreating somewhat on Thursday, but they promise to remain high during the coming winter. Co-ops and condos that do not have a fixed-rate natural gas contract could see as much as a 30 percent increase in their heating and electric bills this winter, according to Bright Power.
“A lot has happened in the last couple of weeks,” says Ben Wallack, director of procurement services at Bright Power. There’s been cold weather throughout the country, and there’s less natural gas in storage than in years past. It’s a simple supply-and-demand equilibrium.”
November is predicted to be one of the coldest on record since 1950, and, as a result, buildings across the country are using more natural gas than predicted. Meanwhile, the nations’ stored natural gas supply is 15 percent lower than it was at this time last year, and it’s 16 percent lower than the 5-year average. It’s now at the lowest level since 2003.
There may be no cause for alarm. “If your co-op or condo has a fixed-price contract through February, don’t worry,” Wallack advises. “If you have a contract that recently expired or is expiring during the winter, we’ve been advising short-term buys of three to four months to get you through the winter.”
Natural gas prices are up 39 percent since the beginning of the year, according to the energy website Benzinga, and forecasters are predicting an extremely cold winter.
“The underlying story,” says Wallack, “is that a lot of price volatility and craziness will probably continue.”
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