Natural Gas Futures

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Natural Gas Futures Market

Natural gas futures are a commodity futures product based on the fuel natural gas, which is used extensively throughout the U.S. to heat homes and also has important applications in commercial and industrial settings. Trading natural gas futures grew out of a need to control price volatility with risk management. It is measured by volume and heating quality. Demand peaks with winter’s heating needs and summer’s air conditioning usage. Natural gas, as a commodity, is a convenient energy source that is piped directly from oil fields into homes. Produced domestically, it is distributed to more than 60 million homes and is considered to be a key source in generating electricity and providing energy for new homes. It is considered an alternative and cleaner burning fuel compared to coal as an energy source. As the competition between the two raises, price volatility in the commodity futures product follows suit.

Natural Gas Futures History

Natural gas was once considered an ineffective byproduct of oil production. Starting in the late 1970s, natural gas futures are relatively new in comparison to other commodity markets. The alternative name for natural gas, “Henry Hub”, originates from the gas pipeline with the same name which runs through Erath, Louisiana.

Natural Gas Facts

  • Natural gas futures are traded on the InterContinental Exchange (ICE), the New York Mercantile Exchange (NYMEX) and the Multi-Commodity Index (MCX) in India.
  • Weather patterns are the best-known price drivers for this commodity futures product, but in recent years global tensions have had a nearly equal impact.
  • Texas, Pennsylvania, Oklahoma, Louisiana and Alaska are the top states for natural gas production in the U.S.
  • One natural gas futures contract on the New York Mercantile Exchange is 10,000 million British thermal units (mmBtu).
  • Delivery months for natural gas futures occur during all months of the year.

Natural Gas Futures Trading

Traders of natural gas futures watch weekly storage and inventory reports published by the Energy Information Administration (EIA), an independent agency of the United States Department of Energy. New information regularly disseminated to the market induces price volatility, which can range from barely noticeable to extreme because though the information is anticipated, its content may not be in line with the market’s expectations.

You can learn more about Energies futures by downloading our guide, Free Fundamentals of Trading Energies Futures.

Natural Gas Futures Contract Specifications

Contract Symbol Contract Unit Price Quotation
GNG 10,000 mil mmBtu dollars per mmBtu
Trading Exchange Trading Hours Tick Value
CME GLOBEX 18:00 – 17:00 $0.001 per mmBtu

RJO Market Update

Nat Gas Resumes Secular Bear

Macro Market Update

Crude Confirms Intra-Range Base/Recovery Count

Nat Gas Bear Risk/Reward Metrics Getting Questionable “Down Here”

Crude Oil Chippin’ Away at Upper-Range Constraint

S-T Crude Oil Failure a Subset of Correction-vs-Reversal Debate, Challenge

Heating Oil Joins Crude in Base/Correction Threat

Energies Reaffirm Bearish Counts, Define New S-T Risk Levels

Volatility, Relapses Tighten Energies’ Key Directional Flexion Points

Jan Nat Gas Bear Continues, Defines New Risk Levels

Trail Crude Oil Bear Risk