tag:blogger.com,1999:blog-10911751.post3434955555837444128..comments2024-03-07T02:00:01.582-05:00Comments on NEI Nuclear Notes: Why Building Too Much Natural Gas Capacity to Generate Electricity Could Come Back to Haunt FloridaUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-10911751.post-23859545718268216742013-05-21T20:13:33.207-04:002013-05-21T20:13:33.207-04:00Short-term price variations can have various effec...Short-term price variations can have various effects in the market and for end users. Utilities that have winter-peaking demand mostly use short-term contracts for seasonal supply, negotiated anywhere from one month prior to delivery out to one year. A good example might be the purchase in June of a futures contract for December delivery. Utilities enter into numerous short-term contracts with different pipeline suppliers for different delivery dates in order to ensure a reliable supply of natural gas at competitive rates for their customers.<br /><br />Short-term variations have a fairly significant impact on the "spot" price. The spot market is a source of natural gas that is needed within a matter of days rather than months. The spot market allows local natural gas utilities to respond quickly to changing weather or other market conditions, or local problems with delivery, storage, and use rate. The spot market is especially sensitive to changing market conditions and spot market prices quickly respond to changes in weather or availability of supply.<br /><br />A small amount of natural gas that utilities use during the winter heating season is contracted for under “long-term contracts” – contracts that are negotiated one year or more in advance of physical delivery of the natural gas.<br /><br />Like all commodity markets, speculative buying and selling often moves the prices paid for futures contracts. Speculators are particularly attuned to changes in supply and demand, so if there is a broad-based perception that the demand side will remain strong with no counterbalance in supply, short-term prices will be the first to reflect the long-term trend.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10911751.post-56905440782815982812013-05-21T11:29:45.249-04:002013-05-21T11:29:45.249-04:00How do daily fluctuations in the futures market sp...How do daily fluctuations in the futures market speak to long-term price trends? That's like denying global warming because it's chilly on Thursday.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10911751.post-62710031575675744842013-05-20T14:38:06.144-04:002013-05-20T14:38:06.144-04:00Today in Bloomberg:
"Natural Gas Climbs for ...Today in Bloomberg:<br /><br /><b>"Natural Gas Climbs for Second Day on Outlook for Hot Weather,</b><br /><br />Natural gas futures advanced for a second day in New York on forecasts for above-normal temperatures that would boost demand for the power-plant fuel to run air conditioners...The futures jumped the most in three weeks on May 17 after the U.S. conditionally approved the Freeport LNG liquefied natural gas export project in Texas."<br /><br />http://www.bloomberg.com/news/2013-05-20/natural-gas-rises-5-from-week-ago-as-u-s-approves-lng-exports.html<br /><br />Whoever didn't see this coming, probably should have seen it coming.onyerlefthttps://www.blogger.com/profile/02751338072385901468noreply@blogger.com