## Abstract This article analyzes the relationship between electricity futures prices and natural‐gas futures prices. We find that the daily settlement prices of New York Mercantile Exchange's (NYMEX's) California–Oregon Border (COB) and Palo Verde (PV) electricity futures contracts are cointegrate
Managing the upside: Strategic pricing with natural gas futures
✍ Scribed by Mitchell, Jacquelyn S.
- Publisher
- John Wiley and Sons
- Year
- 2008
- Weight
- 327 KB
- Volume
- 7
- Category
- Article
- ISSN
- 0743-5665
No coin nor oath required. For personal study only.
✦ Synopsis
Abstract
The availability of the natural gas futures contract offers industry participants the opportunity to enter into stable supply agreements with partners of known reliability even though both parties to the agreement have differing views on the timing and magnitude of price changes.
Although the examples were based on agreements between a marketer and end user, the concepts work equally as well for agreements between marketers and LDCs, between producers and marketers, and for direct‐purchase agreements between producers and LDCs or end users.
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