Natural gas is a major source of energy other than petroleum and media. It is mainly used for power generation and heating, and is also a raw material for fertilizers and chemicals. Transportation is currently carried out in the form of liquefied or compressed natural gas, with Western Europe, North America and Asia being the most mature demand areas. At present, the main producers of natural gas are the United States, Russia, and also major consumers. Henry Port Natural Gas Futures, traded on the New York Mercantile Exchange (NYMEX), is the price benchmark for natural gas and is a major risk tool for managing high-volatility natural gas.
Contributing factors:
1. Production in major producing countries
2. Global economic and political situation
3. exchange rate
4. Climate, seasonality
5. Alternative energy development
6. War, blockade, embargo or economic sanctions
Advantages:
1. Deep, liquid market
400k contracts traded daily, 1.4M of open interest.
2. Global benchmark
World’s 3rd largest physical commodity futures; use growing in South America, Asia &Europe.
3. Capital efficiency
Control a large contract vale with a small amount of capital. Used properly. It’s a powerful way to increase capital efficiency.
4. Nearly 24-hour electronic access
Get around-the-clock trading via the CME Globex, CME ClearPort venues and Trayport Joule Direct.
5. Physical settlement
NYMEX NG futures are closely connected to the spot market, reducing slippage.
6. Safety & Security
Central clearing helps mitigate counterparty credit risk.
