Why You Should Consider Renewing Your Energy Contract Early
In the last year, oil and gas prices have jumped nearly two-fold.
The reasons are many, including a significant increase in energy demand, lagging domestic production, an increase in the export of liquefied natural gas (LNG), and the war in Ukraine, which has led to countries shunning Russian energy supplies.
While it's forecasted that U.S. oil and gas production will increase by about one million barrels per day in 2022, that 10 percent is not enough to meet demand. (For context, the last time prices were this high, in 2014, production increased by 20 percent.)
If you're responsible for your business' energy decisions, you may be wondering if the best strategy is to wait it out for prices to drop or to renew your contract before commodity prices rise even higher.
In a volatile energy market, your business is likely to benefit most from a proactive approach. Here, we explain why you should consider renewing your energy contract early.
A point-in-time purchase may not yield the best results
When managing your energy contract, procrastination is not your friend. In fact, you may want to consider your options long before your contract is up for renewal.
Future energy prices are volatile — and fluctuate constantly. During periods of volatility, “waiting it out” may seem like the most appealing (and smart) choice. But energy prices are not projected to fall anytime soon — and are likely to continue to rise.
Renewing your contract before this happens can protect your business' energy budget in the long run.
You can take advantage of a dip in the market
By working with your energy partner on your strategy ahead of time, you can act faster when the market is most favorable. (Businesses who locked in their rate when the market was lower than it is today know all too well the perks of being proactive.)
By partnering with an energy supplier that has strong market expertise, you can take advantage of proactive market monitoring and adjust your strategy over time.
Are you ready to renew your energy contract?
If you're curious about your renewal options — and if you're wondering if now is the right time – our experts can help. IGS Energy works proactively on your behalf to manage market volatility, seize opportunities and follow a strategy — while simplifying the process for you and your business.Learn more about managing market risk