Quote:
Originally Posted by CaptainYooh
It almost seems like I have a horse in this race  . I honestly don't, just enjoying the peaceful discussion.
I would correct your latter statement: "heads I win, tails I don't lose much." You will be losing for as long as you stay locked at a higher rate and remember to go back to market, which is a time-consuming nuisance and easily forgettable thing to do.
This is where the assumption is false. Super cold winter results in an increased demand for natural gas, yes. But it doesn't automatically result the supply prices to increase, because natural gas producers may have the production capacities increased in anticipation of the cold weather and now they have to get rid of their produced gas at whatever pries the market movers can sell it for. This is precisely why natural gas market is so wildly unpredictable. |
Agreed "much" is a fair addition. I'm looking at it as very cheap insurance. At $3.79 I'm not paying much more right, and it is definitely possible for rates to spike this winter. If they do I win big, and if they don't the difference is very likely to be small enough that it isn't substantial.
That "and" didn't mean to imply that a cold winter will automatically lead to high prices, (ie, the sentence goes "cold winter and then high prices" not "cold winter therefore high prices"). A cold winter is a likely pre-condition for a price spike. I would comment that cold snaps generally aren't helpful for natural gas production due to hydrates, although obviously that's a transitory issue. Would you say there is a lot of spare natural gas production capacity at the moment? I wouldn't have thought so.