Last week I heard over and over again, "that's it, prices are going to keep going up"! Summer is around the corner and that means prices are going up. In the past, this may have been true...but this is not the past.

We have strong economic factors at play, demand destruction, and a weak hurricane forecast. This all adds up to uncertainty on when the market will start climbing again for any sustained amount of time. That being said, natural gas is up ~$1/mmbtu since the end of April. Of course, the economic news has been strengthening the markets as well....lower than expected unemployment rates, real estate rebounding in certain markets, etc. So, have we seen the bottom of the market?

Not sure that it actually even matters. If you look at the history of natural gas performance you'll see ups and downs in the chart....it looks a bit like a mountain range with very big peaks and very deep valleys...but we are definitely in a VERY deep valley at the moment. Prices haven't been this low in years. The bottom is relative...especially when you look at the 20 day moving average of the 12 month gas strip. It basically shows that if you are signing an energy contract while gas is under $8/mmbtu then you are beating the rolling average for the past several years. That is a GOOD thing when you consider how volatile the market swings really are.

So, I guess it comes down to what you think that your risk profile is. If you you like things closer to the center then locking now might make a lot of sense. If you like a bit more risk (and can tolerate it) then maybe you stay on a variable rate product and see what happens. Finally, if you don't like taking risk and you like beating the odds (and that is good enough rational) then sign now and take out several years because you have history on your side!

Whatever your current stance on the market, it is hard to argue that rates are low...unexpectedly low.

All the best.