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Monday, 21 October 2013 13:27

GAS PRICES

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For the week ending October 18, gas markets saw a good amount of stability with prices being held relatively in line with the prior week’s close.  Temporary resolution in the nation’s debt ceiling limit, and reopening of the government appears to have already been priced in.  Weather and temperature levels were in line for this time of the year, and the run-up we saw in the prior week which was attributable to the uncertain winter season was not given back.  Prompt month gas was off a penny from last week’s close, and the 12, 24, and 36 month strips were all off anywhere from $0.02 - $0.03.  The week ended with the 12, 24, and 36 month spreads were unchanged from the prior week.

Locking in a fixed price contract for the winter season on the face looks to be expensive given the run-up in the curve from week ended October 11.  This past week as mentioned above was flat, so there was no correction in what appeared to be an anticipatory run-up.  Cold weather could bring additional upside pressure to prices, which could be hedged using a fixed price product to lock in your power and gas rates for the winter season.  Customers can elect not to pay this premium and bear additional price risk by electing to sign onto a variable price product for power and gas.

Read 6530 times Last modified on Monday, 21 October 2013 13:33
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