If this newsletter is your only view of the NYMEX Henry Hub prices, you might think this was another uneventful week.

If you’ve been sneaking looks throughout the week, and saw the NYMEX prices on Monday and Tuesday, you know different. At the start of the week, there was plenty of excitement when prices dipped below $6.00. Since then, prices have returned to near previous levels, and the anticipated winter price rise is beginning to take effect in the longer term futures prices.

The reason for this “skinny” dip? Perhaps an end-of-month selloff on gas futures by investors. There is a lot of short-selling…investors betting that prices will go down rather than up…in the natural gas commodities market right now, and that drives prices down, especially for those who held their expiring futures a bit too long and need to take what they can get.

The important thing to understand is that this kind of volatility… more than 10% down and 10% up within a four-day span…is now part of the way natural gas prices work. Fundamentals may run the show in the long term, but speculative bubbles can have a profound day-to-day effect.

At the same time, the timeframe for energy contracts is slowing down, as everyone in the credit chain tightens their requirements. The same providers who are taking a closer look at your credit application are enjoying the same scrutiny from their own credit sources. That takes time.

These are all byproducts of the financial meltdown and the “credit tsunami.” And natural gas prices are beginning to have byproducts of their own. Reports are showing that domestic natural gas production is slowing down, as prices make it less and less attractive to produce. This includes less exploration for new wells, producing wells being shut down, and refineries trimming production. The modest injection this week was partially due to Gulf Coast facilities closing down to do post-Ivan repairs.

All of which leads to talk of a “bounce.” At a certain point, as production is curtailed, factors of supply and demand will come to the fore and prices will rise, no matter what shape the economy is in. Given the way that market volatility is amplifying fundamentals, how high will this bounce go?

What’s the best way to prevent a bounce from turning into an error? Cost Containment Intl., has recommendations. You want to know about them.

Check the NYMEX.

The news of the week, and this is news which should catch your attention, is the near total lack of movement of natural gas prices since our last newsletter.

Stocks ricocheted like a ping-pong ball.

Oil dropped, as much as 7% in one day, and then dropped some more.

Natural gas sat tight.

Up until this point, there has been a fairly consistent coupling of prices in the energy commodity market, with oil and natural gas moving more or less in tandem. This is no longer the case, and hasn’t been for the past few weeks. Yet another of the “usual suspects” in predicting movement on the NYMEX is no longer acting according to plan. We’re running out of suspects.

Which brings us to a question we have been hearing from a lot of Cost Containment Intl.’s customers: “shouldn’t I wait and see if prices go down even more?”

The answer is: “that depends. Are you willing to live with being wrong?”

Waiting for the price to bottom is known as market timing, and we don’t recommend that customers try and time the market. The credit approval process, especially in the current financial times, makes it very difficult to take advantage of temporary price drops. And sitting on your hands in hope of an “even better” deal makes it easy to wait just a little bit too long and miss a good one.

Our customers have found best success by setting a target range for savings and acting as soon as prices fall within this range, rather than seeking the lowest price possible. The current price for natural gas should be within most people’s desired range.

On a side note: a recent article noted that some utilities will be raising their residential prices by up to 30% this winter because, following standard best practices, they purchased their winter gas in July and August. It certainly seemed like a good idea when indicators were pointing to prices above $20 by winter. This points up once again the importance of having some hedge built into your natural gas plan. Do you know what your best hedge is, and how to build a plan around it? Give us a call. This would be a great time to find out.

Check the NYMEX

Energy prices continue to be the one piece of good news in the American economy, as a combination of low demand, tight credit and investor wariness kept prices down across the board. The anticipated October rise has been put on hold…indeed, it feels like almost everything has been put on hold…as everyone waits, and hopes, for the credit markets to respond positively to the government’s rescue efforts.

Meanwhile, energy prices sit there, an opportunity for anyone positioned to take advantage.

How much of an opportunity? It’s notable that several large providers have begun curtailing long-term (4 year +) contracts due to the difficulty in predicting price trends beyond a 36-month horizon. Whether we will see a NYMEX price under $7.00 again, given so many changing factors, is anyone’s guess. A lot of people think we won’t.

We were calling the energy market a “wild ride” even before the financial meltdown changed the story and made things even wilder. This is a good time to understand ways you can hedge your energy bets. At Cost Conatinment Intl., that’s our core business. There is a strategy to deal with even the most dire financial situation, and we can show it to you.

Check the NYMEX

So, how’s your pulse right now? This was a very tough week. While many Americans are wondering how the current financial situation will affect their lives, you already know. You’ve been dealing with the effects for weeks.

Anyone who is still unsure about the role that speculation played in natural gas prices this summer should look at the NYMEX figures for this week. The story of the past seven days has been investors pulling money out of just about everything…the stock market, the commodities market, all markets…while they wait for the government bailout/rescue plan to have some palpable effect on credit. No one is lending, so no one is buying, and no one is taking any risks at all.

The gradual pullout of investors from commodities such as natural gas has resulted in a drop from highs over $14 in July and August to below $7 this past week. The basic forces of supply and demand are back in control, and at the moment, supply is in good shape and demand is slack.

On the supply side, strategic reserves will be near last year’s record level going into winter, fall weather has been mild with winter weather expected to at least start out the same way, and hurricanes have had only a temporary impact on production. On the demand side, the current economic situation has caused the American economy to hit the shutoff valve.

But like the Terminator, speculators will be back. So will double-digit natural gas prices. Not this year, probably not next year, but eventually.

Where some see crisis, others see opportunity. Where some hold their collective breaths, others act. Ask Warren Buffett. Or ask us. Cost Containment Intl. believes there are opportunities in the energy market right now which no one could have imagined a few months ago. This is a great time to act if you know the right steps to take. We’ve got strategies you will want to hear about. Credit is tight. Liquidity is in short supply. But everyone is in the same boat right now, and new buyers are very welcome. If you’re tied down on natural gas and electricity, there are opportunities in your other operational spends.

Check the NYMEX