July 2021 - Quarterly Market Letter
On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of...
Natural gas purchasing is a major expense for many commercial and industrial clients. The complexity of contracting options and the lack of good resources leave many clients wondering what to do next. It is critical to create a proactive and comprehensive natural gas procurement strategy to successfully reduce and control energy costs over time. It is also important to understand how natural gas purchasing might impact other client needs including resiliency, risk exposure across multiple commodities, and price risk during extreme weather events.
As with all procurement, 5’s proven process for helping clients begins by collecting data about the client and the market. When clients work with 5, they gain valuable access to the information and visualizations needed to understand their options while also working with a team that takes the time to understand the client’s operational and corporate goals. The result is a natural gas procurement strategy that is customized for the client, appropriately balancing risk and opportunity, while providing flexibility when there is a shift in the client's needs or market dynamics.
Our energy advisors and pricing analysts work together with our clients to determine the best natural gas procurement strategy including:
• Futures market timing, term length, and multi-tranche hedging strategies
• Fixing versus floating locational basis risk
• Monthly versus daily index settlement risks and risk premiums
• Firm versus interruptible capacity
• Balancing and swing contract provisions
• Best suppliers to include in RFP for specific load types and geographies
Contact Us to learn more about how 5 can help with your natural gas procurement needs.