Last week’s NYMEX price was all about market forces. End-of month short covering. Prices had already dropped substantially even as last week’s newsletter was being written. They’ve been gradually working their way back up this week; note the rise in the long-term averages. No surprise a week into January. But last week’s jump had a pretty clear explanation, because since then prices have remained below $6.00.

So, what have we learned from this? Hold that thought for a moment.

Next: a question I guarantee you will answer incorrectly.

People have been asking why the prices of oil and natural gas have been “decoupled,” or moving in different direction, of late. The reason is that while the United Sates relies on imports for more than 60% of our petroleum, we meet about 85% of our natural gas demand with domestic production.

Which brings us to our next question: the number one exporter of natural gas (and oil, for that matter) to the United States is Canada. Which country comes next? The answer is below.

What this means to you. Last week’s NYMEX prices taught us that short selling in the commodities market will tend to give NYMEX prices a bump at the end of the month. All other things being equal, it’s a good idea NOT to wait until the end of the month for the best pricing. That’s one price factor you can count on.

But how often will all other things be equal? Not very. Last week was a rare event: a single price factor came to the fore and had a recognizable, predictable effect. A teachable moment, as they say. Most of the time, there are many factors working independently and simultaneously to push the price in different directions. When your goal is long-term energy savings, you need to keep track of all of them.

For example: how much do you know about Trinidad? Did you know that this little Caribbean island is the second largest exporter of natural gas (in the form of Liquid Natural Gas, or LNG) to the United States? That’s the correct answer to our question. And while LNG imports currently account for about 1% of domestic natural gas demand, experts predict that over the next decade imports from dependable Canada will decline, with LNG imports taking their place.

In a week where Russia effectively turned off the natural gas supply to a substantial part of Europe because of a long-standing dispute with Ukraine, the fact that foreign exports will have an increasing effect on US natural gas prices is a significant consideration for your energy plan. Today, not so much. Tomorrow and the day after, more so. Which is why the political situation in Trinidad could, one day, play out in your gas bill.

That’s what Cost Containment Intl. is all about. For our customers, we’re building a stable energy future on the big picture. Balancing the trends and looking for the advantages. And we’re dead serious about saving you money in 2009 and beyond.

Check the NYMEX

Happy New Year! I’m back and ready to explore all the possibilities a new year offers.

First thing I need to tell you: we’re running out of natural gas! Of course, this won’t happen in any of our lifetimes (hey, they told me to start using “grabber” headlines…).

The question of long-term natural gas reserves, is however, a serious one. The United States currently meets more than 80% of our natural gas demand domestically, and the future of our energy stability and independence rests, in part, on how long we can maintain this.

So…how much is still down there? To answer this question, we need to get to know a few interrelated terms:

Conventional Natural Gas vs. Unconventional Natural Gas

Discovered Resources vs. Technically Recoverable Resources (vs. Economically Recoverable Resources)

Reserves vs. Proved Reserves vs. “Other” Reserves

All of these terms play a part in understanding the answer to our question, and needless to say, there are no universally accepted definitions for any of them. They are used differently by geologists, engineers, accountants, and others. And you’re going to be hearing them…a lot…in the coming years.

You can guess what this means. Each estimate of available, or potentially available natural gas in the ground in the United States is based on a different set of assumptions, complete with different tools and even referred to with different language. Since these are essentially “educated guesses” as to the amount of natural gas that exists in the earth, there are constant revisions being made. New technology, combined with increased knowledge of particular areas and reservoirs mean that these estimates are in a constant state of flux.

We’ll dive into definitions next week. If anyone wants to beat me to it, and sends me good definitions, I’ll make you a co-author.

Check the NYMEX