Is it a good idea to lock in natural gas prices for the coming year (calendar year 2009)?

Last I checked Nat gas was floating down but in this market who knows. One thing I do know in this area two additional companys really decided to try and dump some gas. It happened to be these companys bought/contracted to pay a higher price a year ago or so. When there offer hit the mail box august/september I had a good laugh since there offer was much higher than our standard utility rate and still is by a wide margin.

I spread the word by local communication and no one that I am aware signed up. Looks like those two companys will be eating the gas or dumping there contracts at a loss. I wish I had a crystal ball. The sand bunnys just choped production thinking that would add a base support to the price of oil also. But it did not really stop the fall. Our consumption of oil is down quite a bit right now because with all the job loss, transportation repossession (the banks holding pens is way loaded with cars/trucks every month before the auction) and general less energy usage since no one has the extra bucks to pay for it. Our nat gas supply from Canada is solid so for this year I am sticking with what I have for a supplier.

If you want to try and out guess them go to the net and look to see what the future contracts are selling for. That will give you a general idea what everyone is willing to wager price wise for next year. In this market you can make a million $$$ per day or loose two million $$$ per day. Its your choice. LOL

I would continue to wait and watch commodity prices. I think they still have some room to fall. I never thought we'd be below $40/barrel oil with talk of $30. Next winter might be a different story.

So you have a supplier that will lock for a calendar year (Jan to Dec)? Around here (northeast) most locks are offered in the late summer.

I remember back in the late 90's our utilities company offered what they called a budget plan. It was basically a flat rate throughout the year. If your usage was below what you paid you would get a rebate for the difference. Ah the good old days.

Depends also if there are other conditions in contract to lock-in price. My propane supplier presented a plan that locked in the price per gal. but they also required that you estimate the number of gallons you would use by a certain date (May 1 ?). For every gallon under the estimated amount, you have to pay 25 cents per gallon (for the oil you don't use!). It seemed like they were encouraging me to use more oil to avoid the penalty. Also I was supposed to sign acknowledging all the conditions but they reserved the right to change the conditions if they felt it to be necessary. No thanks.

Depends also if there are other conditions in contract to lock-in price. My propane supplier presented a plan that locked in the price per gal. but they also required that you estimate the number of gallons you would use by a certain date (May 1 ?). For every gallon under the estimated amount, you have to pay 25 cents per gallon (for the oil you don't use!). It seemed like they were encouraging me to use more oil to avoid the penalty. Also I was supposed to sign acknowledging all the conditions but they reserved the right to change the conditions if they felt it to be necessary. No thanks.

Yes good to check the details of the plan. My propane provide had a lock for certain number of gallons, which get used first. So if you underestimate and the prices goes up you're paying higher prices during the higher usage time of year. I didn't sign up anyway since I follow commodity prices and knew we were headed down, or at least not up.