The difference between your local market price for a commodity, and the price of a financial hedge for that commodity is called “Basis”. During the life of a hedge, the basis will change. Sometimes in the hedger’s favor; sometimes against. In addition, in some markets there are seasonal patterns that can emerge.
As a result, an understanding basis is important to players in the energy market when it comes to both hedging and pricing deals out into the future.
To assist, POWERHOUSE can perform our standard basis analysis of your local market to NYMEX prices, local markets to one another, or NYMEX commodities to one another. This analysis will show how effective the two sides are as hedges to one another, and will reveal any seasonal trends in basis between the two price series being compared.