Natural gas rates plunge

Record low overnight temps forced me to dial up the thermostat this morning, bringing back unwelcome memories of last year’s heating bills, which rivaled my monthly mortgage payment.

This year, though, it looks as though we’re in for a break.

Natural gas commodity prices are down 60 percent since the start of the 2009 – about a seven- or eight-year low, according to Kobi Platt, an analyst with the Energy Information Administration at the U.S. Department of Energy in Washington, D.C.

“This is a tremendous swing from last year,” said Platt. “And generally speaking, the lower prices we have seen this year will be passed on to consumers.”

That’ll be welcome news to your readers, so you might want to consider a fall heating outlook soon.

Run it as a personal finance package, contrasting this year’s outlook to last year’s astronomical heating rates. (Keep in mind that the entire natural gas price drop won’t be reflected on residential bills; local utilities have been buying fuel contracts all year at a variety of prices and we don’t yet know what weather or an economic rebound will do to demand.)

You also could stick to a straight business angle by looking at the commercial implications of lower natural gas prices. And they’re more numerous than you might think.

Only about a third of the 20 trillion or so cubic feet of natural gas consumed nationwide each year is used for residential and commercial heath. Another third is used in industrial processes – both as an energy source and as an ingredient in products ranging from fertilizers to plastics. The drop in demand by manufacturers, who’ve reined in production throughout the recession, has a lot to do with the current sky-high inventory levels and low prices.

The final third is used to generate electric power – and with natural gas prices dropping so precipitously, your local utilities might be reducing their reliance on coal even further. That’s another angle to check on, including the implications for electricity rates.

The EIA site’s natural gas portal is a wealth of resources, particularly the narrative monthly short-term energy outlook (sign up for the e-mail feed) and the weekly natural gas storage update – that’s a market mover and a key indicator of future price fluctuations. Don’t worry if you don’t understand this vast and complicated industry – EIA analysts like Platt are available by phone to walk you through the data.

Another angle is retail choice. Some states have allowed competitors to challenge monopoly utilities; here’s an EIA map that shows what’s going on in your area. If you have competitive suppliers, check with consumers to see how that’s working.

Be sure to check with your local utilities themselves and state public service regulators about rates and forecasts, as well as local residential and commercial users.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Revamping retirement stories

Given the stock market dive of the past year, it would be fitting if retirement plan statements came embedded with those tiny greeting-card sound chips, only instead of “Happy Birthday” they could emit the ominous themes from “Jaws” or “Halloween.”

Then again, many savers have been pitching the statements unopened into a drawer rather than torment themselves with the 40-percent gouge in their nest egg.

But on Friday, the major U.S. stock indices closed at peaks not reached since last fall, and oil futures touched a 2009 high.

In even better news, the Friday spike was driven by good news on the housing front. Here’s a previous Daily Tipsheet with links to resources for covering stock swings.

The midsummer market rally has once again piqued interest in investing, however. So, even if you don’t manage a full-time personal finance beat, you should consider localizing market moves with a little expert advice.


The key to a good personal finance story is making it digestible. Long blocks of prose are a turn-off, so use an alternative format like a Q&A or a case study. One of the most useful is a life-stage approach – find five advisers and ask them each to address an age range – 25, 35, 45, 55 or 65 years old – listing dos and don’ts for investors in each decade.

Be picky about your experts. There are honorable people in all occupations, but human nature being what it is, I’m more comfortable relaying tips from fee-only advisors who don’t work on commission from brokerage or insurance firms. Perhaps the most respected credential belongs to Certified Financial Planners; you can do a zip code search for those in your area at the Certified Financial Planner Board of Standards site.

Meanwhile, if finance isn’t your forte, brush up on investing terminology at Morningstar Inc.’s free investing classroom. You must register, providing some personal information, but the 172 self-paced modules will give you the grounding every business writer should have in stocks, bond, mutual funds and other investing basics.

Best of all, the units feature quizzes, so you can tell immediately whether or not you’ve grasped the concepts. Morningstar analysts also are a great source of insight when markets fluctuate.

Remember, there’s nothing people like reading about more than their own money, so burnish your byline by brushing up on personal finance.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.