energy prices

[Donald]

While hunting around to see if a pre-paid price our church was offered for heating oil was a good deal, I found this from the gov. I understand everything except the price of natural gas. It looks like a sine wave. Why? (Click on the dots to get it to change from gas to diesel, etc). http://www.eia.gov/forecasts/steo/

 

[Pop_Rivit]

Natural gas is used extensively to generate electricity. Without looking at your chart, I'm guessing that it's high in the summer (high electrical demand for air conditioning) and low in the winter (lower electrical demand).

 

[Alfred_B]

http://www.eia.gov/pub/oil_gas/natural_g...html/ngbro.html

 

[BowNisPar]

Can't comment on the sine wave, but I've never heard of churches offering products/services like that... is that a regional thing?

 

[Shannow]

The highs and lows are the same spot for electricity...highest in summer, and cheapest in winter. Electricity, they can turn down the power stations to 30-40% of peak production (or turn them off), so the curve is there, but reasonably flat. Gas doesn't have the turndown, so they have to cheapen prices to encourage discretionary users to use it. Higher prices in peak demand times lad the discretionary users to cut back some, and helps fund new wells/plants/imports. Oz is in a strange case at the present time, with all of the gas fields in Queensland coming on to meet their future export contracts, and flooding the market from time to time. Spot market gas WAS $4.40/GJ (Oz, so roughly translates to $4US/1000cuft) a year ago, and is scheduled to go to $10 when the export market kicks in, which will be the death knell for most gas fired power stations in Oz. However in the interim, there are days that it drops to 50c as new wells come in, and liquification plants come on line. As this happens, the 30 year old semi mothballed turbines come in and burn the cheap gas for a profit, making the glut go away.

 

[Donald]

Originally Posted By: BowNisPar

Can't comment on the sine wave, but I've never heard of churches offering products/services like that... is that a regional thing?

Not offering, but offered. I am the church treasurer and am looking at oil for the coming winter.

 

[bubbatime]

Oil prices are going down due to worldwide declining markets. Might want to wait a bit to buy.

 

[Pop_Rivit]

Originally Posted By: BowNisPar

Can't comment on the sine wave, but I've never heard of churches offering products/services like that... is that a regional thing?

The church isn't offering anything. It's being offered a prepaid contract for heating oil by a heating oil supplier. We do the same thing and just contracted for our propane at 94 cents/gallon for the coming winter (actually almost the next 2 years).

 

[andyd]

Yah, buying fuel oil is nuts. I would be more concerned about a plant maintenance contract than a few cents here or there on oil. I would also keep the building warm enough to keep the pipes from freezing, and no warmer.

 

[Kawiguy454]

If prices were rising would it make business sense for them to lock in a lower price for 2 years? ...It is because price is dropping that they want to lock in on the high side. American Oil reserves will continue to drive price down as more is pumped out of the ground.

 

[SVTCobra]

Originally Posted By: Pop_Rivit

Natural gas is used extensively to generate electricity. Without looking at your chart, I'm guessing that it's high in the summer (high electrical demand for air conditioning) and low in the winter (lower electrical demand).

Being from South Texas where winter doesn't really exist, the highest demand ever set on our local substation occurred in the winter during some really cold weather. My dads business when running represents 1/2 of the electrical load in the summer of the substation and none in the winter. So to say that summer creates higher demand is not universally true, at least for South Texas.