Natural Gas Apr '21 (NGJ21)
|Tick Size||0.001 per MMBtu ($10.00 per contract)|
|Daily Limit||15% above or below previous settlement|
|Contract Size||10,000 MMBtu (million British thermal units)|
|Trading Hours||5:00p.m. - 4:00p.m. (Sun-Fri) (RTH 8:00a.m. - 1:30p.m.) (Settles 1:30p.m.) CST|
|Value of One Futures Unit||$10,000|
|Value of One Options Unit||$10,000|
|Last Trading Day||Trading terminates three business days prior to the first calendar day of the delivery month|
Natural gas is a fossil fuel that is colorless, shapeless, and odorless in its pure form. It is a mixture of hydrocarbon gases formed primarily of methane, but it can also include ethane, propane, butane, and pentane. Natural gas is combustible, clean-burning, and gives off a great deal of energy. Around 500 BC, the Chinese discovered that the energy in natural gas could be harnessed. They passed it through crude bamboo-shoot pipes and then burned it to boil sea water to create potable fresh water. Around 1785, Britain became the first country to commercially use natural gas produced from coal for streetlights and indoor lights. In 1821, William Hart dug the first well specifically intended to obtain natural gas, and he is generally regarded as the "father of natural gas" in America. There is a vast amount of natural gas estimated to still be in the ground in the U.S. Natural gas as a source of energy is significantly less expensive than electricity per Btu.
Natural gas futures and options are traded at the CME Group. The CME natural gas futures contract calls for the delivery of natural gas representing 10,000 million British thermal units (mmBtu) at the Henry Hub in Louisiana, which is the nexus of 16 intra-state and inter-state pipelines. The contract is priced in terms of U.S. Dollars per mmBtu. CME also has basic swap futures contracts available for 30 different natural gas pricing locations versus the benchmark Henry Hub location. Natural gas futures are also traded at ICE Futures Europe.
Prices - CME natural gas futures (Barchart.com symbol code NG) on the nearest-futures chart started 2019 at $2.930 per mmBtu, moved lower most of the year to finally close the year down -25.3% at $2.189 per mmBtu. The price continued to move lower into 2020.
Supply - U.S. recovery of natural gas in 2018 (latest data) rose +10.9% to a record high of 36.991 trillion cubic feet. The top U.S. producing states for natural gas in 2018 were Texas with 24.0% of U.S. production, Pennsylvania with 19.0%, Oklahoma with 9.0%, Louisiana with 8.6%, Colorado with 5.6%, Wyoming with 4.6%, and New Mexico with 4.5%. In 2019 the world's largest natural gas producers were the U.S. with 3,003,354 Terajoules and Russia with 2,051,081 Terajoules of production.
Demand - U.S. total delivered consumption of natural gas in 2018 rose +10.4% yr/yr to 27.482 trillion cubic feet, of which about 38.8% was delivered to electrical utility plants, 30.2% to industrial establishments, 18.2% to residences, and 12.7% to commercial establishments.
Trade - U.S. imports of natural gas (consumed) in 2017 (latest data) rose +1.2% yr/yr to 3,042 billion cubic feet, down from the 2007 record high of 4,608 billion cubic feet. U.S. exports of natural gas in 2017 rose +35.6% yr/yr to 3,168 billion cubic feet for a new record high.
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