I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank

"frank1492" wrote in message
...
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank

The way I see it, it's like putting money on a commodity in the stock
market. You can go short (bet that it will drop) and you can go long
(betting that it will go up. I've been watching the price of Natural gas. It
was more than double what it is now just a short time ago. It's been
hovering around $6.50 to $7.50 per unit that they use, for a long time even
though oil was dropping. I think the down side of it is here now and that it
will rise in price in the near term future. I would try to lock in a price
around what you have now. Either that or just put your gas money on a
roulette wheel and take red or black :')

"frank1492" wrote in message
...
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank


What exactly does "for the winter" mean? It there a normal seasonal
summer/winter difference with fluctuations? If so, I'd say it is close
enough to the lock in rate that it will most likely be higher in January so
locking is a good deal. It is not so high that you'd suffer great loss if
it did not change. You'd have peace of mind and if it went to $1.60 you'd
have tears of joy.

frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.

This may be not easy to do but I would try to find another supply. There
is something immoral in trying to con you into buying a future supply at
a higher price. A supplier who tries to turn a biz transaction into a
Las Vegas style toss of the dice doesn't deserve my business.

Chris wrote:
frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.

This may be not easy to do but I would try to find another supply.
There is something immoral in trying to con you into buying a future
supply at a higher price. A supplier who tries to turn a biz
transaction into a Las Vegas style toss of the dice doesn't deserve
my business.

One of the first principles learned in an MBA program is: "Trade variable
costs for fixed costs at every opportunity." The same applies to profits.

In the case at hand, the gas company may have locked in NG at, say,
$1.00/therm (they've traded a variable costs for fixed cost), and are now
trying to lock in a fixed profit.

In the non-MBA world, this process is called "insurance."

On Nov 18, 11:39�pm, frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
� � � �Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
� � � Your ideas would be much appreciated!
� � � Thank you.
� � � � � �Frank

I wouldnt with our economic collapse energy is dropping, just look at
crude oil......

natural gas is dropping too.

On Nov 18, 10:39*pm, frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
* * * *Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
* * * Your ideas would be much appreciated!
* * * Thank you.
* * * * * *Frank

The price they are quoting seems at least 25% higher than what it
could be if they were fair and current, recent price declines in Ng
are not reflected in your price, its printed material? so its maybe a
month old. Wait next offer will be lower or call for a present price.
Google nat gas price charts and compare what you paid in the past to
the charts. I would not lock in at what they offer now call them and
tell us what they offer now. Gasolene here was 4.50 today its 2.11.

Thanks all for your help. Both sides of the argument
are good, but I think I will probably lock in. It's really the
old supply-demand argument that swayed me, and I
am thinking it will be very cold in the NE for most of the
winter (based on everything I read.) We shall see.
Thanks again!
Frank

On Nov 19, 4:39*am, frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
* * * *Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
* * * Your ideas would be much appreciated!
* * * Thank you.
* * * * * *Frank

The world wide price of LNG is coming down as more and more companies
are building terminals and pipelines.

On Nov 19, 4:59*am, "Ed Pawlowski" wrote:
"frank1492" wrote in message

...

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
* * * Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
* * *Your ideas would be much appreciated!
* * *Thank you.
* * * * * Frank

What exactly does "for the winter" mean? *It there a normal seasonal
summer/winter difference with fluctuations? *If so, I'd say it is close
enough to the lock in rate that it will most likely be higher in January so
locking is a good deal. *It is not so high that you'd suffer great loss if
it did not change. *You'd have peace of mind and if it went to $1.60 you'd
have tears of joy.

Costs are lower then his quote by 50%, his quote is old and price will
still come down, unless a new war starts. I would not lock in at that
high a price, its like locking in oil at last months price.

On Nov 19, 3:27 pm, RobertPatrick wrote:
frank1492 wrote :

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank

I always select the fixed option. Looks like you call that locking in.

I have oil and could have locked in last winter at $2.35/gallon. I
didn't and ended up paying an average of $3.10/gallon - got burned.
This year when it came time to lock in oil was skyrocketing. I had an
offer to lock in at $4.70. I didn't. Now it's back down to $2.35/
gallon, roughly half of what I could have locked in for. I have
neighbors who are beside themselves for locking in and have to pay
$1000 to get out of their contract - which might actually be worth it
now. It's pretty horrible that speculators are allowed to manipulate
the commodity markets the way they do. I think that the only people
who should be allowed to buy commodities are the people who can
actually take ownership of what they buy.

Joe wrote:
On Nov 19, 3:27 pm, RobertPatrick wrote:
frank1492 wrote
:

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank

I always select the fixed option. Looks like you call that locking
in.

I have oil and could have locked in last winter at $2.35/gallon. I
didn't and ended up paying an average of $3.10/gallon - got burned.
This year when it came time to lock in oil was skyrocketing. I had an
offer to lock in at $4.70. I didn't. Now it's back down to $2.35/
gallon, roughly half of what I could have locked in for. I have
neighbors who are beside themselves for locking in and have to pay
$1000 to get out of their contract - which might actually be worth it
now. It's pretty horrible that speculators are allowed to manipulate
the commodity markets the way they do. I think that the only people
who should be allowed to buy commodities are the people who can
actually take ownership of what they buy.

If YOU had an opportunity to buy a contract, YOU are a "speculator"
irrespective of whether you participated.

Your neighbors lost $1000. But someone else made $1000 profit.

It averages out.

"RobertPatrick" wrote in message


What exactly does "for the winter" mean?

We only run our furnaces in the winter.


True, but what about other gas consumption?
Does that mean you take cold showers in the summer? Cook on the woodstove?

On Nov 19, 9:43*pm, "Ed Pawlowski" wrote:
"RobertPatrick" wrote in message

What exactly does "for the winter" mean?

We only run our furnaces in the winter.

True, but what about other gas consumption?
Does that mean you take cold showers in the summer? Cook on the woodstove?

Does that mean you take cold showers in the summer?

Haven't you seen the old westerns where a busty young woman pours hot
water from the pot on the woodstove into the big tub that the cowboy
is sitting in?

On Tue, 18 Nov 2008 23:39:35 -0500, frank1492
wrote:

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank



No one knows and whoever thinks is just speculating. Utility
companies who set these options up are more likely to make more money
than lose, else they would not do it.

On Nov 20, 10:55*am, Phisherman wrote:
On Tue, 18 Nov 2008 23:39:35 -0500, frank1492
wrote:

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
* * * Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
* * *Your ideas would be much appreciated!
* * *Thank you.
* * * * * Frank

No one knows and whoever thinks is just speculating. * Utility
companies who set these options up are more likely to make more money
than lose, else they would not do it.

...else they would not do it.

I don't know the answer to this question, but I wonder how many of the
utilility companies are forced to offer pricing options by whatever
utility board they have to answer to?

Since the possibility exists for them to lose money (e.g. *everyone*
chooses the fixed option and prices rise) I wonder how many of the
options are offered because they have to be.

"HeyBub" wrote in message
...
Chris wrote:
frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.

This may be not easy to do but I would try to find another supply.
There is something immoral in trying to con you into buying a future
supply at a higher price. A supplier who tries to turn a biz
transaction into a Las Vegas style toss of the dice doesn't deserve
my business.

One of the first principles learned in an MBA program is: "Trade variable
costs for fixed costs at every opportunity." The same applies to profits.

In the case at hand, the gas company may have locked in NG at, say,
$1.00/therm (they've traded a variable costs for fixed cost), and are now
trying to lock in a fixed profit.

In the non-MBA world, this process is called "insurance."

Some of the airlines locked in their price a while back. Now they're really
sorry.

Bob F wrote:
....
Some of the airlines locked in their price a while back. Now they're really
sorry.

OTOH, while prices were escalating, they were in good shape.

It's "risk management" and any sensible company will do what they can.
As I noted in a previous thread, in many ways price instability is far
worse economic difficulty than is absolute price level.

--

"DerbyDad03" wrote in message
...
On Nov 20, 10:55 am, Phisherman wrote:
On Tue, 18 Nov 2008 23:39:35 -0500, frank1492
wrote:

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank

No one knows and whoever thinks is just speculating. Utility
companies who set these options up are more likely to make more money
than lose, else they would not do it.

...else they would not do it.

I don't know the answer to this question, but I wonder how many of the
utilility companies are forced to offer pricing options by whatever
utility board they have to answer to?

Since the possibility exists for them to lose money (e.g. *everyone*
chooses the fixed option and prices rise) I wonder how many of the
options are offered because they have to be.

************************************************** ********

They just buy futures to cover them if the price goes up. No risk is involved
for the utility.

"Bob F" wrote in message
...

"DerbyDad03" wrote in message
...
On Nov 20, 10:55 am, Phisherman wrote:
On Tue, 18 Nov 2008 23:39:35 -0500, frank1492
wrote:

I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.
Is this a good idea do you think? I will need to guess
whether gas prices will go up in the NE. I do know that
the NE is expected to be colder than normal this year.
Your ideas would be much appreciated!
Thank you.
Frank

No one knows and whoever thinks is just speculating. Utility
companies who set these options up are more likely to make more money
than lose, else they would not do it.

...else they would not do it.

I don't know the answer to this question, but I wonder how many of the
utilility companies are forced to offer pricing options by whatever
utility board they have to answer to?

Since the possibility exists for them to lose money (e.g. *everyone*
chooses the fixed option and prices rise) I wonder how many of the
options are offered because they have to be.

************************************************** ********

They just buy futures to cover them if the price goes up. No risk is
involved for the utility.

And if the price goes down ... they don't lose money on the futures? Wish I
could find some like that.

Bob F wrote:
....

They just buy futures to cover them if the price goes up. No risk is involved
for the utility.

They would certainly be glad to find out how you're going to remove any
risk for them. (You _are_ going to educate them on what they've been
doing wrong aren't you?)

--

Bob F wrote:
"HeyBub" wrote in message
...
Chris wrote:
frank1492 wrote:
I live in Massachusetts and my natural gas is
supplied by Nstar. I have been given the option to lock in
my gas price for this heating season at $1.2624 per therm.
It is also noted that, as of Nov.6, the gas supply charge
"for the winter" is $1.2424.

This may be not easy to do but I would try to find another supply.
There is something immoral in trying to con you into buying a future
supply at a higher price. A supplier who tries to turn a biz
transaction into a Las Vegas style toss of the dice doesn't deserve
my business.

One of the first principles learned in an MBA program is: "Trade
variable costs for fixed costs at every opportunity." The same
applies to profits. In the case at hand, the gas company may have locked
in NG at, say,
$1.00/therm (they've traded a variable costs for fixed cost), and
are now trying to lock in a fixed profit.

In the non-MBA world, this process is called "insurance."

Some of the airlines locked in their price a while back. Now they're
really sorry.

Almost all of them did. When they hit their ususal cash-crunch, they sold
them. Only Southwest maintained their futures contracts and, until the end
of this year, have been buying jet fuel at an average price of $53/bbl.