Natural gas prices plunge from historic highs
Welcome back. It's been a record breaking couple months for Nat Gas. The prices are down almost 80% September. They went below two bucks a contract on Wednesday. Brian Sullivan is here with more. Now we're saying it's mostly good news. What's the asterisk? Yeah, I mean, I think so.
It's good news for Europe. Get to that in a second. Hi, everybody. Yeah, natural gas above two now was below two. We were at nine last fall. You think about it. I mean, what's going on? All right.
Number one, supply to ban, right? Eco 101. It is too much gas. The weather, by the way, it's what 65 degrees here right now. It's 84 degrees in Richmond, Virginia, breaking the previous record by I think nine degrees according to AccuWeather. Warmest February ever in New York City. I'm not a meteorologist. No, I play one on TV, but it goes to gas demand.
No one's hitting their home except like Minneapolis. So everyone's furious because they're like, why am I paying $800? And it's we I've talked about California. We hear it in parts of New York. It's sort of perverse that at the very moment the futures or spot prices plunging, these utility bills are way up. What's going to happen? Normally, I mean, they have to go through, they have to ask for rate hikes. This was all happening over the summer. Will they come down very quickly now or not? Are regulators going to kind of wink, wink, nod, nod, you know, leave them up? Yeah, because utilities are really good at lowering prices all the time, right? I mean, they just want to get right on that.
California is doing a rebate $50. Yay, $50 rebate, right? Half a tank of gas. Okay. So why is your electric or heating bill up if you're on gas and gas is down? Number one is a lag. Okay. Number two, the price we show on TV, that's the con. It's a paper contract.
In Massachusetts, they have what's called CityGate. It's sort of the delivery price, what they use. It was at 18 last year. It's now down. So prices should come down, but you're paying what they bought it for six months ago. So you're, you're heating bills going up as we're saying, well, natural gas is going down. Exactly.
So probably the most important question for our audience, many of whom might have gotten really into energy last year, watching oil go up, watching NatGas, watching, you know, hearing about the energy crisis. I heard about that. Yeah, I heard about that too. Glad it didn't happen. The energy crisis, that is. The stocks have actually held up relatively well. I mean, if you look at a lot of the leading NatGas producers, let's call them, not a disaster, they're certainly not down 80%.
What explains that? Well, because they're still going to make money. I mean, right? I mean, now the stocks will see if they hold up. Right. I mean, a lot of NatGas bulls will tell you prices are on a dip because there's too much, we oversupplied, Freeport LNG was offline. We had all this inventory. They're going to have to start shutting in maybe wells, right? If you're a NatGas bull, you're like, okay, Freeport's back online. That's the second biggest exporter.
Maybe supply cutbacks coming. And oh, by the way, the weather could change. Right. Again, not a meteorologist. It's like, everything's fine. Well, right. But then if it flips and all of a sudden we don't have all of this.
What if this, this hot winter turns into a super hot summer and now we're just cranking the air conditioning in New Jersey, New York, you know, even places like Denver. So you never know what could happen with the weather. And I always pay attention to Brian Reynolds. We've had him on the show, a Ponomous Research firm. He's not an energy specialist, but he has many times called these commodity moves correctly because he understands sort of the structural underpinning of the markets. And he's saying the futures curve indicates NatGas prices won't go above $5 until at least 2035. Wow.
What if we, well, listen, Brian, if you can make a prediction 12 years out, who's going to win 19, 2028 Kentucky Derby? He's saying the market is so oversupplied that it almost looks like it and with the, and he's, and others have said we've gone from shortages to gluts. Now this gluts over supplied based on a lower demand curve, according to AccuWeather, 25% fewer heating days in America this year, particularly in the Northeast, Europe, Rome, 65% decline in heating days. So that's, thank God, Europe is literally being saved by the weather. People are coming at me saying, oh, you're reporting all these worst case scenarios. We didn't know what was going to happen with the weather. And it's good. What if it was super cold for months? They'd be in deep, deep, doodoo, I think is the term.
And the scramble to raise inventories to forestall this was the most important thing. And by the way, they're paying for it. I want to be very clear on one point. Yes, Europe's got great energy storage, net gas, that's good news. Yay. However, they're still paying $15 dollars equivalent. We're paying two.
They're borrowing money to subsidize industries and households. Don't be surprised if this energy problem crisis, whatever becomes a debt issue. I'll give you a random, but interesting, I'll give you a number. $98 trillion in emerging markets debt, highest ever, 250% of GDP. Why do I bring that up? Because they're having to pay up for energy as well. Because Europe is taking the energy they would have bought. Great point.
There could be sovereign debt issues a year from now because of what's happening. It's a good thing the show's coming. What date? Thank you, by the way. Yes, we have a new show. Last call is the name. Wednesday, March 8th, 7pm Eastern, 4pm Pacific, 5.30 in Denver.
I don't know what they're on Mountain Time, whatever that is. I don't think it's a half hour. Two and n's going to be a totally different thing. The show looks great. The anchor, I hope, holds up. I hear he's fabulous. He's loud.
Brian, thank you.
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