About Natural Gas
US natural gas is priced at Henry Hub in Louisiana. It heats homes, generates electricity and increasingly feeds LNG export terminals, which link US prices to Europe and Asia. It is one of the most volatile major commodities.
What moves the natural gas price
- Weather: cold winters and hot summers raise heating and power-burn demand.
- The weekly EIA storage report (Thursdays 10:30 am ET) compared with expectations.
- LNG export capacity and outages at export terminals.
- Dry-gas production levels and pipeline constraints.
A weather market
US natural gas is one of the most volatile major commodities because demand swings with temperature while supply changes slowly. Cold winters lift heating demand; hot summers lift gas burned in power plants for air conditioning. Traders follow heating degree days (HDD) and cooling degree days (CDD) forecasts out to two weeks, and a shift in the 6-to-10-day outlook can move the price several percent in a session.
Unlike oil, gas cannot easily be shipped between continents without liquefaction, so regional prices can diverge sharply. US Henry Hub, the Dutch TTF hub in Europe and Asian LNG prices are linked by LNG export capacity: when export terminals run flat out, US prices feel international demand; when a terminal goes offline, more gas stays at home and Henry Hub tends to fall.
Storage and the Thursday report
Gas is injected into underground storage in the warmer months and withdrawn in winter. The EIA Weekly Natural Gas Storage Report, normally Thursdays at 10:30 am US Eastern Time, shows the change in working gas versus expectations and compares total storage with the five-year average. A surplus to the five-year average generally weighs on prices; a deficit going into winter can make the market jumpy.
Seasonality and the curve
The industry calls April to October the injection season and November to March the withdrawal season. Winter contracts usually trade at a premium to summer contracts. The spread between the March and April contracts, nicknamed the "widow-maker", reflects the risk of a late-winter cold snap draining storage, and it has a long history of violent moves. Shoulder months in spring and autumn, when neither heating nor cooling is needed, often see softer prices.
Because of this strong seasonal pattern, continuous charts can show jumps on roll dates as the front month changes. If you study long-term charts, keep in mind that a price move may partly reflect switching from a summer to a winter contract.
Supply side
Most US gas now comes from shale basins such as the Appalachian (Marcellus and Utica) and Permian. Permian gas is largely a by-product of oil drilling, so oil prices influence gas supply. Pipeline bottlenecks, freeze-offs in severe cold and hurricane-related outages on the Gulf Coast can all disrupt flows. Weekly rig counts and production estimates from pipeline data services help traders track supply trends.
Contract specifications
| Benchmark future | NYMEX Henry Hub Natural Gas (NG), CME Group |
|---|---|
| Contract size | 10,000 MMBtu |
| Price quote | US dollars and cents per MMBtu |
| Minimum tick | $0.001 per MMBtu = $10 per contract |
| Contract months | Every calendar month, many years forward |
| Settlement | Physical delivery at the Henry Hub, Erath, Louisiana |
| Last trading day | Three business days before the first day of the delivery month |
| Smaller contracts | E-mini Natural Gas (QG) 2,500 MMBtu, cash-settled |
Specifications as published by the exchange; they can change, so confirm on the exchange website before trading.
Trading hours
CME Globex trades almost around the clock: Sunday to Friday, 6:00 pm to 5:00 pm US Eastern Time, with a one-hour daily break.
Contract basics
NYMEX Henry Hub Natural Gas (NG) covers 10,000 MMBtu. Minimum tick is $0.001 per MMBtu ($10 per contract).
Quote unit
USD per MMBtu. Hours and specifications can change; always confirm on the exchange's website, especially around holidays.
Natural Gas FAQ
What moves the price of natural gas?
Weather: cold winters and hot summers raise heating and power-burn demand. The weekly EIA storage report (Thursdays 10:30 am ET) compared with expectations. LNG export capacity and outages at export terminals. Dry-gas production levels and pipeline constraints.
When does natural gas trade?
CME Globex trades almost around the clock: Sunday to Friday, 6:00 pm to 5:00 pm US Eastern Time, with a one-hour daily break.
What is the standard natural gas contract?
NYMEX Henry Hub Natural Gas (NG) covers 10,000 MMBtu. Minimum tick is $0.001 per MMBtu ($10 per contract).
Why is natural gas so volatile?
Demand depends heavily on short-term weather, storage is limited relative to winter peaks, and supply cannot adjust quickly, so forecast changes move prices sharply.
What is an MMBtu?
One million British thermal units, a measure of energy content. Natural gas is priced by energy rather than by volume.
When is the EIA natural gas storage report?
Usually Thursdays at 10:30 am US Eastern Time, with holiday-week adjustments.
Are US and European gas prices the same?
No. Henry Hub (US) and TTF (Europe) are separate markets linked mainly by LNG trade, and European prices have often been several times higher.