Should I lock in a fixed price for natural gas?

robynpa

15 years ago

I received a letter from my gas Co that said I can lock in a natural gas rate of $12.74/Mcf through Oct 2010.

Is this a good idea?

Thanks!

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Comments (11)

western_pa_luann
15 years ago
If you think prices will go up, lock in.

(my crystal ball is broken....)
lucy
15 years ago
Not a good idea seeing as oil, anyhow, is dropping like a stone on the market.
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duluthinbloomz4
15 years ago
I've heard natural gas was going to be the "bargain" this heating season. There are vast reserves of this non-renewable resource; however, no one can really tell until it's extracted exactly how large the reserves are.

I'd be a little hesitant to lock in myself - but so far we haven't been given that option so it's a non starter.
mariend
15 years ago
We lock in for propane, and if it goes down, that is what we pay.
chisue
15 years ago
Most such 'deals' have proven a bad choice in our area over the years. Remember who is offering it and their motives for doing so. LOL
robynpa
Original Author
15 years ago
Thanks for the input. I think I will not lock in.
joyfulguy
15 years ago
Usually those who make such offers make sure that their derriere is covered ... A three-DollAr word for a three-letter one (that starts with "a", ends with "s").

Gas companies pipe in the gas over a longer period and store it in large underground caverns, from which they draw it, along with current throughput of the pipeline, to serve customers during times of heavy usage.

As the supply gets close to scarce, the price that they charge goes up.

How warm a winter are we going to have during the coming months? And we expect (demand?) that there be enough gas to serve our needs throughout. If it's a colder winter than usual, as supplies get drawn down to nearer break-even, prices to non-contracted customers will advance.

Talk to neighbours, friends, colleagues, parent-teachers' group members, church-goers, etc. about their experiences in recent years, as they chose to contract ... or not to do so.

Don't forget: knowledge brings power.

ole joyful
stolenidentity
15 years ago
I'd lock in on the price, Natural Gas heating is actully supposed to go up significantly this year, much more than electric energy. If I had an option to lock my charge right now I'd do it in a heart beat!
fandlil
15 years ago
I suspect that the gas company has already taken a bet on a futures auction price, and now wants you to share the risk with them. Have fun.
pelican
15 years ago
You would be crazy to lock in that price right now. It is only trading at $6.76 right now. I realize there are shipping, storage, and other costs added, but it does not add up to that. Here is a link to todays energy prices.

Here is a link that might be useful: Current Energy prices
calliope
15 years ago
I did lock in for a couple years when I was doing my mother's accounts for her. It was a good decision then and did save her a small to moderate amount. But those were those years, and not this year. With the volatility in energy and its ups and downs, you can bet the suppliers have covered their behinds. We get ours from a coop, and as such are in a better position for transparency......so I'm not budging with a new supplier.

I'll tell you what happened when my mother passed away and I tried to transfer the account out of her name, they sent a charge to the estate for breaking her contract. Yes, like she had a choice about terminating it early. They kept losing things like the copy of her death certificate too. It took the threat of a lawyer to get them to let her out of her agreement. Beware.

Should I lock in a fixed price for natural gas?

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western_pa_luann

lucy

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Should I lock in a fixed price for natural gas?

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