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, or be locked in via a price lock or locks at later times. However, 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.
To learn about additional natural gas products, visit one of the links below or contact us to explore how a First of Month Index structure may help your business.
Other Natural Gas Products