/biz/ - Business & Finance

>>56242117
Unlike oil markets which are global, natural gas markets are local. That's because you can't exactly transport a cubic foot of gas the same way you transport a barrel of oil. Natural gas is either transported by pipeline just like oil, or it has to be compressed or cooled in order to maintain a liquid form. The natgas futures are for the Henry Hub, which is a natgas hub in Texas. Other hubs may have entirely different pricings even inside the USA, for example the Californian Malin hub prices have had a tendency to spike up to or higher than European natural gas prices due to California's terrible energy market with its intermittency and high price of electricity per kWh.

Henry Hub prices are not directly comparable to prices in other markets, although the increase in LNG exports in Canada, USA and Mexico is going to indirectly raise North American natural gas market prices thanks to supply going into the premium priced LNG facilities (which in turn will sell their LNG to global seaborne markets at more or less... global prices, with Asia and Europe competing over those shipments going forward). It'll take some time but NA natty prices are going to have structural pressure to the upside thanks to the market arbitrage between NA natural gas prices, and natural gas prices in Europe and Asia where natgas is priced higher because they have less access to those molecules.

I don't have an image of US pipelines and I'm too lazy to find one so you'll have to do with this WCSB pipeline image