Reference no: EM13379659
Familiarize yourself with one of the industry publications that reports physical, cash prices for natural gas. Inside FERC, Gas Daily and, OPIS do not allow their pubications to be copied unless you have a subscription and receive prior permission. However, you can access the latest prices from the Natural Gas Intelligence website.
These come directly from the electronic trading platform The Intercontinental Exchange (ICE).
They are actual transactions for physical natural gas trades at the specified locations. ICE is based in Atlanta, GA. and they also own the International Petroleum Exchange (IPE) in London.
Key Observations for the Natural Gas Intelligence website:
1) Notice the column titles: "High" - the highest price traded on the day. "Low" - the lowest price traded on the day. "Wtd Average Index" - this is the average price when calculated using the volumes traded at each price. This is more accurate than a straight average price. "Change" - the difference between this day's price and the prior day's price. It indicates the market change. "Volume (mmbtu)" - the total amount of gas traded at that location that day (in MMBtus). "Number Trades" - the total number of transactions at that location. "Number Counterparties" - the total number of different companies that traded at that point.
2) In the ANGEL Drop Box, list the prices at these key areas around the country: EAST - "Transco Z6 (NY)" - this is the price of gas delivered to NYC. GULF/TEXAS - "Henry" - this is the physical delivery point for financial natural gas futures contracts (Lesson 7) GULF/TEXAS - "Houston Ship Channel" - this is the price of gas delivered to the huge petrochemical refining corridor east of Houston (Lesson 3). MIDCONTINENT - "NGPL Midcont" - this is the price for gas in Western OK and the Texas Panhandle. It is also the area we used in Lesson 5 as an example for transportation costs. WEST - "SoCal Border" - this is the price of gas delivered to the border of California for Southern California Gas Company ("SOCAL"), the country's largest LDC. WEST - "Waha" - this is a major pipeline "hub" in West TX (recall the national pipeline grid which shows pipes intersecting one another), which reflects Texas demand as well as demand in NM, AZ and CA. WEST - "Kingsgate" - this is an import point for Canadian gas.
The Natural Gas Intelligence website is a great resource for when you work on your weekly Fundamental Factors for natural gas. You can indicate where cash prices are trading, and that may help you with your trading decisions.