The winter of 2023/24 was reminiscent of a Dickensian tale, the best of times for those prepared and the worst for the unready. Key drivers of volatility included a surge in heating demand, regional disparities in temperature, and unpredictable weather patterns that seemed to be orchestrated by a particularly capricious polar vortex. The early January forecasts painted a series of winter storms sweeping across the lower 48 states, putting immense pressure on the infrastructure critical to gas production and transportation. Volatility was in the forecast, demanding strategy, experience, and a global perspective.
In collaboration with the financial solutions team, our physical solutions team consistently monitored the market to provide direct support to our clients. By diligently tracking daily commodity market movements and understanding the client’s capital goals, Mobius’ physical solutions team crafted strategies for portfolio optimization and upside participation.
In early January, our team of physical marketing experts identified an opportunity for a client to lock in strong pricing for their assets. We recommended selling natural gas at higher prices for the remaining month’s strip balance while ensuring our client maintained the flexibility to respond to unforeseen production scenarios.
“Mobius captured significant upside for our client by actively managing both their physical and financial positions throughout the month, and not ‘setting and forgetting’ their portfolio after the first-of-month elections had been made,” said Drew Boyce, Vice President ofCommodity Risk.
Mobius stands apart from first purchasers as anon-conflicted partner by proactively seeking regular pricing adjustments throughout a given month, compared to fixed-volume sales based on first-of-month pricing practiced by traditional first purchasers.
The Mobius team precisely executed the strategy, locking in a fixed price on targeted volumes through month-end. This resulted in sales significantly higher than the current market pricing. As market volatility persisted during the winter storms, prices dropped significantly from our client’s fixed prices. Our strategy greatly improved our client’s position, resulting in a nearly seven-figure mark-to-market improvement for January. Additionally, our proactive recommendation to secure additional volume sales for February promised another substantial gain for our client.
Our physical solutions team boasts vast expertise and invaluable market knowledge in navigating the intricate landscape of the commodity marketplace, delivering proactive, tailored, and innovative solutions.
“Based on their recommendations, our company captured nearly double Mobius' annual retainer in January alone,” said the CFO of a private natural gas producer.
This client has engaged Mobius as a partner in their comprehensive financial and physical risk management.
Empowering clients to succeed in global commodity markets with award winning technology and expert advisory.
