What you see depends on how you look
Thursday, December 18th, 2008If you are reading the NYMEX numbers looking for indicators of your energy future (as we hope you are), you’re seeing something this week that should interest you. Look past the first few months, which have shown the most volatility. Look longer term. Prices for late-2009 into 2010, which have up until now largely resisted the downward trend in short-term natural gas prices, are beginning to bend to the downward pressure.
At the same time, withdrawals from storage continue run lower than expected, despite the fact that the predicted mild winter is not exactly panning out in the midwest or northeast.
This should interest you greatly.
What this means to you. If we’ve learned one thing this year, it is to resist the urge to make predictions. But these indicators lead us to believe that there is simply too much supply, and too much supply means lower prices. Wells are being shut down, production is being curtailed, but too many producers rushed in during the record prices of July and August, and every attempt to reduce supply is being met by plant closings and slowdowns in the industrial sector.
For you, this means continued opportunity through the winter to improve your energy costs beyond the short term and, for those looking to do so, to lock favorable rates. At Cost Containment Intl., we usually use the winter months to catch up on office work and relax a bit. No such luck this year.
Nothing from nothing leaves…
In perhaps the most telling sign of the current financial situation in America, the US government sold $30 Billion in t-bills last week. Zero yield t-bills. Word is that they could have easily sold two to three times as many of them as they did.
In other words, investors lined up around the block to buy an investment with absolutely no earning potential. People are so nervous about investing that they’ll settle for something that is only guaranteed not to lose them money (actually, the t-bill rate dropped slightly into the negative at the height of the buying).
There’s irony here: our current financial meltdown started when foreign investors lost interest in the low yields of US government-backed securities and found a new favorite investment to replace them: mortgage-backed securities.
What this means to you. When there’s nothing left to invest in, where do you put your money? Under the mattress?
At Cost Containment Intl., we have a different idea. Don’t put it UNDER the mattress. Put it INTO the mattress. In other words, if you can’t invest in anyone else, invest in yourself. Money put into the market may disappear into $50 billion Ponzi schemes, but money spent on hardware upgrades and efficiency improvements keeps bringing returns no matter what the markets do.
Are you still lighting with incandescents? CFLs have never been cheaper. Couple them with room-sensing switches for added savings. Are you holding off on replacing out of date boilers or HVAC systems? You should learn about cogeneration/CHP units. Cost Containment Intl. can audit your current energy systems and suggest responsible investment options. Sometimes, the best way to save is to spend where it counts.