Trading In Natural Gas Futures
The natural gas industry is a crucial segment of the United States economy. Additionally, it provides one of the cleanest burning fuels to all parts of the economy.
Natural gas is a significant global commodity. According to the International Energy Agencys Key World Energy Statistics booklet, natural gas supplies the fuel for 21.3% of worldwide electricity generation, second only to coal. Still the natural gas market is growing. The United States is currently the largest producer of natural gas in the world, followed by Russia.
Natural gas prices, just like prices for other commodities, are dependent on supply and demand. These prices reflect the ability of a supply to meet demands at any given time.
Fluctuations in natural gas prices can have significant impact on producers. Though natural gas and crude oil are energy commodities, the market has witnessed that natural gas prices are much more volatile than crude oil prices. Producers hedge this price risk through futures. Traders also use the futures market to speculate on prices.
These futures are traded on the New York Mercantile Exchange under the ticker symbol NG. Natural gas futures are priced in U.S. dollars and cents per mmBtu. Futures on the New York Mercantile Exchange (NYMEX) are delivered in all months. The delivery point for these futures is Henry Hub in Erath, Louisiana. The size of a futures contract for natural gas on the NYMEX is 10,000 million mmBtu.
Traders looking to trade in these futures can use a number of resources online to track prices. Bloomberg is one of the best resources online to track prices of NYMX futures.
At Barchart, members can seek resources to learn more about natural gas futures. Barchart offers a snapshot of this market daily. Traders can use Barcharts Futures Markets Quoteboards to track natural gas prices.
In addition, Barchart offers daily end-of-day and intraday quotes on futures, including natural gas. Traders can access charts and technical analyses of the natural gas futures market on a daily basis on the Futures Markets Quoteboards page.
The Futures Market page includes the lead contracts of the major North American futures markets and all futures pages are updated every 10 seconds throughout the trading day. This way a trader can stay up to date with the futures market at all times.
To learn more, please visit www.barchart.com. Sign up to begin your free membership today.
by: Creighton Stolarz