Natural Gas

NATGAS's 20-day volatility stands at 3.17% a day, making it livelier than most of the commodities Kinzan tracks (their median is 2.16%).

Today's move is well inside its normal range: +0.3σ, an entirely ordinary session.

It sits in the lower half of its 24-hour range of 3.013–3.114, measured on hourly closes.

The move was spread across the day rather than concentrated in one session; New York contributed the largest share, about 44%.

Over the last 60 sessions NATGAS has had no strong day-to-day relationship with anything else Kinzan tracks — its closest link is WTI at +0.27.

Market read: Natural Gas is pinned at its daily low, showing no signs of a recovery.

What it is

The contract followed on this page is NYMEX Henry Hub natural gas, delivered at a pipeline interconnection in Erath, Louisiana. It is quoted in US dollars per million British thermal units (MMBtu), a measure of energy content rather than volume, and one contract covers 10,000 MMBtu. Henry Hub is a North American benchmark: European gas (the Dutch TTF) and Asian LNG prices are set in their own markets and can trade at very different levels.

What drives it

Weather is the dominant short-term force, and it gives the market a strongly seasonal shape. Cold winters raise heating demand and hot summers raise gas burned in power plants for air-conditioning, so revisions to temperature forecasts can move the price sharply on their own. Every Thursday the US Energy Information Administration reports how much gas was injected into or withdrawn from underground storage, and the gap between that figure and expectations is often the week’s biggest single event. Production from shale basins such as the Appalachian Marcellus and Texas’s Permian, where gas is a by-product of oil drilling, sets supply. The rapid build-out of liquefied natural gas export terminals on the Gulf Coast has tied US prices more closely to overseas demand, and outages at those plants or hurricanes along the coast can swing the balance.

How it trades through the day

Futures trade almost continuously on CME Globex, but the Asia block (22:00–07:00 UTC) is typically thin and dominated by reactions to overnight weather model runs. The London block (07:00–13:00 UTC) sees some European participation, though Henry Hub is far less central there than in the US. Most of the volume and the sharpest moves come in the New York block (13:00–22:00 UTC), especially around the Thursday storage report at 10:30 New York time. It is among the most volatile contracts in the commodity complex.

What it tends to move with

Henry Hub natural gas has historically had only a loose relationship with WTI crude and Brent crude; oil and US gas are priced in different markets with different drivers. Its strongest links are to weather and storage rather than to other instruments on this board, which makes it one of the least correlated assets here.