Natural Gas

This tracks the price of Henry Hub natural gas futures, the benchmark for North American natural gas pricing, traded on NYMEX. The contract is named for a physical pipeline interchange in Erath, Louisiana, where more than a dozen interstate and intrastate pipelines connect — futures contracts are notionally deliverable at that point.

Natural gas prices are heavily influenced by seasonal demand for heating and cooling, storage levels reported weekly by the U.S. Energy Information Administration, and — unlike oil, which is easily shipped globally — historically by domestic U.S. production and pipeline capacity, since natural gas is far more expensive to transport internationally without liquefaction (LNG) infrastructure. Growing U.S. LNG export capacity has increasingly linked Henry Hub pricing to international gas demand as well.

Because storage capacity is finite and demand is highly seasonal — spiking in winter for heating and in summer for electricity generation to run air conditioning — natural gas prices tend to be significantly more volatile than crude oil on a percentage basis, particularly around unexpected weather events.