Headline of the week, from a local Midwest paper:

Coal To Sustain We Energies Bills
Rising Costs Offset Cheaper Natural Gas

Less than six months after the highest natural gas prices in history, with no ceiling in sight, natural gas prices now sit comfortably at a level where costs savings are offsetting the rising cost of….coal. The rules of the energy market are being rewritten on a weekly basis.

It’s important to understand this when you look at the NYMEX and storage figures. There was a time…a pretty recent time, in fact…when you could use them to track trends and make reasoned predictions for natural gas and electricity pricing. But so many competing factors are now at work in the energy market, some in synch with the fundamentals of the market and some completely in their own sphere, that no one is making long-term bets with confidence.

NYMEX is still useful to you. If you’re ready to consider a move to save on your energy costs, the current figures give you a good idea of where prices is – right now (Remember, the NYMEX price is the cost of just the natural gas itself: there will be a sometimes baffling array of transmission and distribution charges to add before you get to the natural gas price you’ll be offered, and similar charges and fees before you get to an electricity rate offer. Our clients rely on Cost Containment Intl. to help them wade through the figures to find the best price.)

The Gambler, he broke even

Last week we talked about hedging. This week it’s all about setting boundaries. Hedging is one source of security in a volatile, unpredictable market. The other is figuring the price you can comfortably afford for your long-term energy needs: one year, two years, or more, then getting that price, rather than chasing an elusive “low.”

As we’ve said before, the best gambler is always the safest player at the table, because he knows when to take his winnings, or pre-empt losing, and walk away from the gambling. Cost Containment Intl. wants to give you a place at, or away from, the table.

Check the NYMEX

Deal of the week for November 20, 2008 -

Natural Gas: we locked a fixed rate for 16 months covering 2 winter periods (2008 & 2009). We got him a price that was below the historical 4-year average NYMEX. He now has the “insurance” that his natural gas risk is stabilized for that term. Savings and stability in one package. You might be next week’s featured deal: give me a call and let’s see what we can do.

Bullish vs. Bearish

Hands up – how many of you actually understand the jargon used to describe trends in the Natural Gas Market? (That’s the great thing about the Web: no one is watching you.) For those who are wondering:
Bullish means the market is being PUSHED upward. Good for investors, not so good for you.
Bearish means that the market is being PULLED downward. Investors are not so happy, you should be thinking bargains.
Problem with both these terms is that they are used to describe “trends’ in the market, and at the moment, a “trend” last for about five minutes. Volatility is synonymous with the Natural Gas Market. Customers ask me to please lock their price when the market hits “absolute bottom”. That’s like throwing a snowball at a speeding train and crowning the engineer. Our goal is to hit the train…and not to still be holding the snowball as the train fades into the distance.

Look back at my deal of the week: it’s for sixteen months. Right now, everyone is following the five-minute trends. I’m working for your long-term security. Those sixteen months will pass, and we’ll negotiate another deal, and keep finding the best price for many, many years to come. To stick with the “snow” theme: skiing is one of my favorite winter sports. I am in the habit of talking myself through some particularly hairy runs, by asking myself: “what the heck are you doing here?”…and answering: “I’m going to conquer the next mogul, and the next, and keep going until I get to the bottom.” There’s still plenty of hill left if you can keep thinking past the bumps.

Check the NYMEX