Natural Gas Prices Today

Natural gas is a versatile and widely used energy source that plays a crucial role in various sectors. It is primarily used for electricity generation, where it serves as a cleaner alternative to coal, helping to reduce greenhouse gas emissions. In residential and commercial settings, natural gas is commonly used for heating, cooking, and water heating. It also serves as a vital fuel in industrial processes, including the production of chemicals, fertilizers, and hydrogen.

Dutch TTF Price Chart

European Natural Gas

The most popular European gas price ticker is the Dutch TTF (Title Transfer Facility) Natural Gas. The TTF serves as the benchmark for natural gas prices in Europe and is commonly referred to by its ticker symbol, TTF. The TTF Natural Gas price is widely used across Europe for trading and pricing natural gas contracts and is considered the standard price reference for the European gas market, similar to how the Henry Hub price is used in the United States. The TTF price reflects the cost of natural gas at the Title Transfer Facility, a virtual trading point in the Netherlands, and it is used in futures contracts, spot trading, and as a benchmark for other gas contracts across Europe.

The Henry Hub Natural Gas Futures (NG) is the benchmark price for natural gas in the United States and is widely used as a standard for pricing natural gas contracts globally. Named after the Henry Hub in Erath, Louisiana, this location is a major distribution hub where multiple interstate and intrastate natural gas pipelines converge, allowing for the movement of gas across the country.

Natural Gas Price Chart

Asia Natural Gas

The Japan Korea Marker (JKM) is a key benchmark for liquefied natural gas (LNG) prices in Asia. It reflects the spot price of LNG delivered to Japan and South Korea. JKM futures, with the ticker JKM, are used to hedge and trade LNG prices in the Asian market. While JKM was initially established to reflect spot LNG prices in Japan and South Korea, it has become the primary reference price for LNG transactions across the broader Asian market, including China.

Despite still being a fossil fuel energy source, natural gas produces the least emissions out of all fossil fuels when burned for power – half as much CO2 as coal and 30% less than oil. That’s why it has an important role to play in the energy transition, as a stop-gap between cheap but dirty energy sources like coal and clean but expensive green power.

Currently, natural gas accounts for the largest share of US electricity generation, at 43.1% in 2023. The most common way to invest in natural gas is through the futures market, and natural gas futures are the third largest physical commodity futures contract in the world by volume. The CME’s Henry Hub natural gas futures, named after one of the largest natural gas distribution hubs in the US, is often used as the reference for natural gas prices in North America. The price of natural gas is affected by various factors:

• Spot & Futures Market: The spot price represents the current market rate for natural gas with immediate delivery, fluctuating in real-time based on factors such as weather conditions, production levels, and storage availability. Futures contracts, on the other hand, enable buyers and sellers to secure a price for delivery at a future date, providing a hedge against market volatility.
• Weather: Prices are heavily influenced by weather conditions (cold winters increase heating), economic activity and fuel competition for electricity.
• Production and Transportation: Natural gas extraction involves drilling into natural gas reserves and transporting the gas through pipelines. In some cases, the gas is cooled to a liquid state and transported by ships.
• Environmental and Regulatory Policies: Governmental regulations that affect mining and safeguard the environment can greatly influence gas production costs and supply.