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Posted by Clark on November 1, 2007, 9:06 pm
> Thank you for all the info I will need! I think I will
> go ahead. In your opinion, is it safe to say that the
> potential advantage/disadvantage of choosing one
> alternative over the other is probably slight? That's
> the way I read it.
> Thanks again for taking the time to help me in
> my decision.
> Frank
>
>
You're welcome. Being aware of gas pricing is just part of my business.
I don't see a lot of pricing risk exposure either way since you guys are
stuck at the end of the supply chain. I'd check the fine print on the offer
to see if there are any min/max volumes that you may run into. It might
also be nice to know if your utility is allowed to hedge or pre-purchase
gas. If they are hedged then the contract pricing probably reflects that
and it's just a way for them to even out monthly gas bills for the
consumer.
>
>
>
>
>>
>>> This applies to the "Gas Supply Charge" portion of the bill. The
>>> current price per therm is $.9799 and the contract price is $.9999.
>>> The relevant time period for the contract is Nov. 1 through Ap. 30.
>>> Two questions:
>>> (1) Historically, does anyone know what the maximum fluctuation
>>> has been during a winter season in the Northeast? (I am in
>>> Massachusetts.) Please point me to data if this is kept.
>>> (2) A very mild winter would likely drive the price down, but I
>>> have heard widely varying reports regarding expected temps in the
>>> NE. Anybody have thoughts on this?
>>> Of course there are other things that could drive the price up.
>>> When oil prices rise, gas seems to keep step for reasons whose
>>> validity I have doubted in the past.
>>> I have until Nov. 9 to make my decision. Should I do this?
>>> Your thoughts are very much appreciated.
>>> Thanks.
>>> Frank
>>>
>>The government's version of gas pricing:
>>
>>http://www.eia.doe.gov/oil_gas/natural_gas/info_glance/natural_gas.html
>>
>>And futures contract prices are here:
>>
>>http://futuresource.quote.com/quotes/quotes.jsp?s=NG
>>
>>Looking at the futures, your current price and the offered contract it
>>appears you'll come out slightly ahead since an increase of about $0.4
>>in Feb then a decrease of about $0.70 (from the Feb price) in April.
>>
>>About the only way you'd get really burned would be if the market
>>collapsed and that's not likely over the winter. The utility may be
>>hedging and is certainly buying from storage so you won't have major
>>exposure with the contract.
>
>
--
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there should be a "sig" here
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