Natural Gas Futures Prices Moving Toward First Quarter Low

The front-month natural gas futures contract price on the New York Mercantile Exchange (NYMEX) tends to hit a first quarter low between mid-December and early-February.  Historically, this low provides a long-term natural gas buying opportunity for end users, i.e. businesses that consume natural gas to run their business.

“The exception to the first quarter low is when the market is coming out of a very large price spike,” says Valerie Wood, President of Energy Solutions, Inc.  “That was the case in 2006 and 2009, but other than those years, the anticipation of the first quarter decline is very reliable.”

Under seasonal cycle analysis, there is a specific percentage and timeframe between the fourth quarter peak and the first quarter low.  “Right now, it appears that the fourth quarter peak may have been hit on October 21, 2009, when the November 2009 natural gas NYMEX contract reached $5.318 per MMBtu,” says Wood.  “Pinpointing the timing of peaks and low is by no means an exact science, but there are technical tools that can assist.  The signs are all lining up to indicate a significant buying opportunity this year as well.”

Learn more about what to watch for with the first quarter low in the November edition of The Advisor, a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry.  It keeps companies alert and aware of ever-changing conditions and costs associated with natural gas to help them make intelligent gas purchasing decisions.  The Advisor is written by Valerie Wood, President of Energy Solutions, Inc., a company that specializes in helping manufacturing companies and larger users of natural gas more cost effectively purchase their natural gas supplies. Request a complimentary copy of the November edition of The Advisor by sending an e-mail to request-nov-pr16@energysolutionsinc.com or call (608) 848-9589.

About Energy Solutions, Inc.

Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 25 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.