What Are Natural Gas Futures?
Natural gas futures contracts are traded on the New York Mercantile Exchange under the symbol NG; the market for these contracts is very liquid, and extremely active throughout the week. Trading in natural gas futures is generally heaviest on Thursdays, when the Department of Energy releases its weekly natural gas storage report.
NYMEX natural gas futures represent 10,000 million British thermal units (mmBtu), and are priced in dollars and cents per mmBtu. Contracts are listed for the current year plus the next 12 years. At the end of each calendar year, the next calendar years is added. On the CME Globex, the current year plus the next eight years are listed.
The price for natural gas futures contracts is based on delivery at the Henry Hub in Louisiana, where 16 intrastate and interstate natural gas pipelines converge. Those pipelines serve markets throughout the U.S.
Natural gas is the second-highest volume futures contract in the world based on a physical commodity.