“Basis” is a financial term and is associated with the physical transportation of a commodity from a trading hub to another point. With natural gas, basis is the contractual cost of delivering your natural gas to your local utility company from the NYMEX natural gas trading point at Henry Hub, LA. A NYMEX plus Basis product, also known as a fixed basis, or basis contract, fixes this difference in locational value, while the commodity cost is left open to float with the NYMEX market price or be locked in at later times.
Many Power Connection clients who anticipate declining or fluctuating market prices use this purchasing strategy as a means to capture value by managing gas price locks which may achieve a lower price over time than that offered by a fixed price product. Power Connection continuously monitors the forward curve of gas prices on behalf of our clients, keeps those clients informed on market
conditions, and makes recommendations according to the agreed-upon strategy. When managed correctly, this product can help avoid risk and capture lower price opportunities.