The Illinois Natural Gas Inventory Forward Sale Contract is a financial agreement used by natural gas market participants to hedge price risk or manage inventory levels in the state of Illinois. This contract allows buyers and sellers to secure a predetermined quantity of natural gas at a specified price, which will be delivered at a future date. The forward sale contract serves as a tool for market participants to mitigate potential fluctuations in natural gas prices, ensuring stability and reliability in supply for consumers. By entering into this agreement, both buyers and sellers can plan their respective operations with more certainty, leading to improved market efficiency. There are several types of Illinois Natural Gas Inventory Forward Sale Contracts, depending on the specific requirements and circumstances of the parties involved. These include: 1. Fixed-quantity contracts: These contracts specify a fixed quantity of natural gas to be delivered at a future date, regardless of any changes in the market conditions or inventory levels. This type of contract is commonly used when the buyer has a specific volume requirement. 2. Index-based contracts: In these contracts, the price is determined based on a specified index, such as the NYMEX (New York Mercantile Exchange) natural gas futures contract. This index-based pricing allows market participants to align the contract price with the current market conditions, providing more flexibility in managing price risk. 3. Swing contracts: Swing contracts offer an adjustable supply quantity within a specified range, allowing buyers to vary their natural gas deliveries based on their actual demand. This type of contract provides flexibility to adapt to changing market conditions and to optimize inventory management. 4. Seasonal contracts: Seasonal contracts enable market participants to secure natural gas supply for specific periods, typically high-demand seasons, such as winter. These contracts help manage the variability in natural gas demand throughout the year and ensure adequate supply during peak periods. Overall, the Illinois Natural Gas Inventory Forward Sale Contract is a valuable tool in the natural gas market, allowing buyers and sellers in Illinois to plan their operations effectively, manage price risk, and ensure a consistent supply of natural gas for consumers.
Illinois Natural Gas Inventory Forward Sale Contract
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FAQ
The Henry Hub Natural Gas futures contract (NG) on the New York Mercantile Exchange (NYMEX) is widely used as a national benchmark price, at 10,000 million British thermal units (mmBtu).
Basic Info. Henry Hub Natural Gas Spot Price is at a current level of 2.63, up from 2.49 the previous market day and down from 6.23 one year ago.
In futures trading, the point value is the value of each point of price movement in a contract. It is used to calculate the profit or loss of a trade. The point value is determined by multiplying the contract size (e.g. number of barrels of oil, bushels of wheat, etc.)
We forecast Henry Hub prices will increase from the current price between July and December 2023, averaging $2.83/MMBtu through the end of 2023, ing to our July Short-Term Energy Outlook. We expect the price to peak at $3.44/MMBtu in December, up from $2.18/MMBtu in June.
The Natural Gas futures contract trades in 0.001 point increments. As each contract is equal to 10,000 MMBtu, a 0.001 point move equates to $10.00 (0.001 x 10,000).
Individual investors and traders most commonly use futures as a way to speculate on the future price movement of the underlying asset. They seek to profit by expressing their opinion about where the market may be headed for a certain commodity, index, or financial product.
0.001, worth $10.00 per contract.
Commodity info Barchart SymbolNGTrading Hoursp.m. - p.m. (Sun-Fri) (RTH a.m. - p.m.) (Settles p.m.) CSTValue of One Futures Unit$10,000Value of One Options Unit$10,000Last Trading DayTrading terminates three business days prior to the first calendar day of the delivery month8 more rows