7 October 2006
The Gas Game (finale)
Okay, we've had twelve months of this, and it cost me sixty dollars and odd.
To recap: Last October, with gas prices in flux, Oklahoma Natural Gas Company offered to sell gas to its customers for a Voluntary Fixed Price of $8.393 per dekatherm, which struck me as a fairly crummy deal, inasmuch as gas was selling in the $6.50 range at the time. So I passed, and gas promptly jumped off the farging scale, as follows:
- November: 2.4 used at $11.044; total price $26.51; VFP price $20.14; loss of $6.37.
- December: 4.4 used at $11.550; total price $50.82; VFP price $36.93; loss of $13.89.
- January: 9.7 used at $12.012; total price $116.52; VFP price $81.41; loss of $35.11.
- February: 6.4 used at $9.589; total price $61.37; VFP price $53.72; loss of $7.65.
- March: 7.6 used at $8.455; total price $64.26; VFP price $63.79; loss of $0.47.
- April: 4.6 used at $8.660; total price $39.83; VFP price $38.61; loss of $1.22.
- May: 2.0 used at $8.781; total price $17.56; VFP price $16.79; loss of $0.77.
- June: 1.2 used at $8.486; total price $10.19; VFP price $10.07; loss of $0.12.
- July: 1.1 used at $7.520; total price $8.55; VFP price $9.53; gain of $0.98.
- August: 1.0 used at $7.566; total price $7.82; VFP price $8.67; gain of $0.85.
- September: 0.9 used at $7.577; total price $7.06; VFP price $7.82; gain of $0.76.
- October: 1.1 used at $7.665; total price $8.71; VFP price $9.54; gain of $0.83.
- Cumulative: 42.4 used at $9.887; total price $419.20; VFP price $356.43; loss of $62.77.
This year's VFP is $9.25 per dekatherm. I'm still debating whether I want to commit myself to this program or not. (Deadline is the 20th.) Clearly, if we're going to have $11 or $12 gas, I need to lock in this price. But are we going to have $11 or $12 gas? If I knew things like this, I could quit my job and live off the stock market.
Posted at 8:35 AM to Family Joules
I won't pretend that I know where natural gas prices are headed, but right now, but spot price according to Bloomberg (http://www.bloomberg.com/markets/commodities/energyprices.html) is $6.43 per million BTUs (aka "dekatherm").
Many of the political situations that played out last winter are not in place now, and more of the Gulf Coast supply is on the market compared to last winter.
My own prediction is that natural gas won't reach the $9.25 per dekatherm price this winter, and I will be billed by ONG accordingly. I did take the VFP last year.
If it helps, El Nino's winters are usually warmer and wetter than average.
Also ONG has already told us they plan to charge us according to what they paid for the gas and they bought it a long time ago when it was high. So the current drop in prices won't be reflected for a few years when they finally start dispensing the gas they are buying right now.
I didn't commit to a fixed price last year either. Not sure I will this time.