The Fair Price Model is a simple calculation that estimates a “neutral” or “equilibrium” price for natural gas by comparing current natural gas in storage to storage levels—a proxy for supply and demand--and prices over the past 24 months. If natural gas is trading above this “Fair Price” value, the commodity is said to be overvalued and downside risk tends to outweigh upside potential whereas if natural gas is trading below this value, natural gas is said to be undervalued and the opposite is true.
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Disclaimer: Natural Gas Storage Projections, Intraday Natural Gas Stats, Morning Reports, and fundamental pricing models are released by Powerburn as experimental products. While they are intended to provide accurate, up-to-date data, they should not be used alone in making investment decisions, or decisions of any kind. Powerburn does not make an express or implied warranty of any kind regarding the data information including, without limitation, any warranty of merchantability or fitness for a particular purpose or use.