Natural gas futures trade on the NYMEX/CME exchange and represent US domestic natural gas delivered at the Henry Hub in Louisiana. Natural gas is used for electricity generation (40% of US power), residential/commercial heating, and industrial processes. The US is now the world's largest natural gas producer thanks to the shale revolution, and a major LNG exporter.
Natural gas prices are driven by weather forecasts (heating demand in winter, cooling demand in summer), weekly EIA storage reports (Thursday 14:30 UTC), LNG export terminal capacity, production levels (associated gas from oil drilling), pipeline infrastructure, and seasonal demand patterns. The commodity is extremely weather-sensitive and can move 5-10% on a single forecast change.
Natural gas is the most volatile major commodity — daily moves of 3-5% are routine. It has strong seasonal patterns: prices typically rise from October-January (winter heating) and fall from March-May. Storage levels relative to the 5-year average are the key fundamental indicator. Not for the faint-hearted.
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Common questions about Natural Gas (NG=F)