Since 2000, Natural Gas Has Been Above Today’s Prices More Than 96% of the Time
The title of the Mar 20th Energy Update was “Today’s Low Natural Gas Prices Are Déjà Vu, What Can We
The title of the Mar 20th Energy Update was “Today’s Low Natural Gas Prices Are Déjà Vu, What Can We
The title of the Mar 20th Energy Update was “Today’s Low Natural Gas Prices Are Déjà Vu, What Can We learn From The Past?”.
The goal of that report was to help you understand history was repeating itself and you should not delay hoping for lower prices. The upside risk was too great to justify waiting hoping for slightly lower prices.
In addition to the empirical evidence contained in the Mar 20th Energy Update, the following chart quantifies why waiting for slightly lower prices is not in your best interest:
The fact that since 2000 prices have been higher than today more than 96% of the time makes it easy to understand why since 2000, when prices declined to near present levels, they were always much higher the following 36 months.
And as shown in the next chart, in the 4 previous instances when Natural Gas declined to unsustainably low prices similar to today; the average price was always much higher the following 36-months therefore, based on this empirical evidence we believe the average price will again be much higher the next 36 months.
Our hope is the empirical evidence presented in this report helps you understand history is repeating itself and if you have an agreement expiring within the next 18 months you don’t delay hoping for lower prices. The upside risk is too great to justify waiting in the hope for slightly lower prices.
Not every client’s risk tolerance and hedging strategy are the same, but the above report will help you put into perspective the risk/reward opportunities. I invite you to call one of our energy analysts to help you plan a hedging strategy appropriate for your situation.
Ray Franklin
Energy Professionals
Senior Commodity Analyst
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