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related
also:
 Natural
Gas
Commodities - Market
Contracts for
natural gas futures
contracts on NYMEX are binding agreements
to accept delivery of the commodity in Louisiana, at the Henry
Hub
facility.
Both natural gas futures and options are used by traders
for the management of risk, as well as the ‘spark spread’ – the
price between electricity futures and natural gas futures.
Natural gas finds the bulk of its demand in generating electricity,
fueling turbines, and for home heating and cooking purposes. It
burns cleanest among all the fuels.
Typically natural gas has methane as its main component. It is
found among fossil oil reserves, whereupon it is released along
with the oil on drilling. Natural gas is too found in the form
or "biogas"
that comes from
nature's synthesis of aged marsh
areas,
and even landfills.
Exploitation of natural gas among indigenious shale reserves,
will continue to increase supply in the United States. Estimated
numbers in reserves, are in the 3.8 trillion cubic foot
range. Combine this, with the new EPA regulations to limit
coal pollutants, and natural gas will likely be an active commodity
through 2011
onward. Though extraction benefits will not be limited to within
the county, as natural gas is due to become a major
export commodity via liquefaction methods.
In the United States, the condition of declining supply combined
with increasing demand has
in past years led to proposals of LNG (liquefied natural gas).
However LNG poses its own
set of challenges in the form of creating new stations & terminals,
in transportation distribution (beyond pipelines) and in the outlays
of large sums of capital that are necessary for its realization.
Some analysts do see the LNG alternative as possibly affecting
the natural gas trading
market, one way or another.
Options on natural gas futures were first introduced on October 2, 1992. Which
for the first time allowed greater trading strategies either by
itself or in conjunction with futures.
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