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First of the Month Index

First of the Month Index

A First of Month Index is similar to a NYMEX plus Basis in that the commodity cost is left open to float with market prices but can later be fixed through a price lock at a later time. With this product the basis, or transportation cost, is also left open to float with market prices and the price is relative to a particular delivery point.

The index used for this product is typically the closest geographic trading point to a client where an index price is set (Chicago City Gate, TET M-3, PG&E City Gate, Houston Ship Channel). This product is typically suited for clients who want their natural gas costs to fluctuate with market and be representative of local price conditions.