Natural gas is the most volatile of the major commodities. The US benchmark, Henry Hub, is quoted in dollars per million British thermal units and trades on NYMEX. Demand depends heavily on the weather, gas is expensive to store and hard to move, and supply cannot respond quickly, so a change in the two-week forecast can move the price by 5% or more in a day.
Key takeaways
- Henry Hub is a pipeline junction in Louisiana and the delivery point for US gas futures.
- Weather is the main short-term driver: cold winters and hot summers both raise demand, for heating and for power used in air conditioning.
- The weekly storage report, Thursdays at 10:30 New York time, is the key scheduled event.
- Storage fills from April to October and is drawn down from November to March; prices reflect whether stocks look adequate for winter.
- US and European gas prices are separate markets, linked only partly by liquefied natural gas exports.
| US benchmark | Henry Hub, Louisiana; NYMEX futures |
|---|---|
| Unit | US dollars per million British thermal units (MMBtu) |
| Futures contract size | 10,000 MMBtu |
| Key report | EIA Weekly Natural Gas Storage Report, Thursday 10:30 New York |
| Injection season | April to October |
| Withdrawal season | November to March |
| Typical daily move | 3–5%, more in winter |
| Symbol at Marketsall | NGAS |
How are natural gas prices set?
Unlike oil, gas does not have one world price. It moves by pipeline, and only a minority is chilled into liquid and shipped. The United States prices gas at Henry Hub, Europe at the Dutch TTF hub and Asia on a Japan–Korea marker. US prices are usually far lower because the country produces more than it uses. Most retail gas CFDs track Henry Hub futures.
Why is natural gas so volatile?
| Reason | What it means in practice |
|---|---|
| Weather sets demand | A colder or hotter forecast changes expected consumption immediately, and forecasts change twice a day. |
| Storage is limited and costly | Gas must be kept underground under pressure, so there is little buffer when demand jumps. |
| Supply responds slowly | Wells cannot be switched on for a cold week; much gas is a by-product of oil drilling. |
| Transport is rigid | Pipelines have fixed capacity, so regional shortages cannot be relieved quickly. |
| Few substitutes in the short run | Households and power plants cannot change fuel overnight. |
The combination produces sharp spikes and equally sharp collapses. In February 2021 a winter storm froze wells and pipelines across Texas and regional spot prices rose many times over within days. In 2022 Henry Hub reached its highest level since 2008 as exports to Europe surged, and it then fell by more than three quarters within months as a mild winter left storage full.
What moves natural gas prices?
| Driver | How it tends to work | What to watch |
|---|---|---|
| Weather forecasts | Colder winter or hotter summer outlooks raise prices. | Six-to-ten and eight-to-fourteen day temperature outlooks, heating and cooling degree days |
| Storage levels | Stocks below the five-year average support prices; stocks above it weigh on them. | EIA weekly storage report |
| Production | Record US output caps rallies; freeze-offs and hurricanes cut it suddenly. | Daily pipeline flow estimates, rig counts |
| LNG exports | Export terminals add steady demand and tie US prices more closely to Europe and Asia. | Terminal outages and new start-ups |
| Power sector demand | Gas competes with coal and renewables in electricity generation. | Summer heat, wind and solar output |
The storage report and the trading week
| Event | Local time | UTC (summer / winter) | Frequency |
|---|---|---|---|
| EIA Weekly Natural Gas Storage Report | Thursday 10:30 New York | 14:30 / 15:30 | Weekly; shifted around US holidays |
| Weather model updates | Several times a day | Varies | Daily, including weekends |
| Futures expiry | Three business days before the delivery month | Varies | Monthly |
The report gives the change in gas held in underground storage. Traders compare it with forecasts and with the five-year average for that week. Because weather models update over the weekend, gas often gaps at the Sunday open; see gap risk. Release timing is in the economic calendar.
Natural gas vs crude oil vs gold
| Feature | Natural gas | Crude oil | Gold |
|---|---|---|---|
| Typical daily move | 3–5% | 2–3% | 1–2% |
| Main short-term driver | Weather | Supply news and inventories | Real yields and the dollar |
| Global or regional price | Regional | Global | Global |
| Seasonality | Very strong | Moderate | Weak |
| Read more | This guide | what moves crude oil prices | XAUUSD guide |
Futures for different months can trade at very different prices in gas, so the adjustment at rollover can be large, and a chart that stitches contracts together can mislead. Winter contracts normally cost more than summer ones.
What it costs to trade natural gas as a CFD
A natural gas CFD tracks the futures price without delivery. See what a CFD is.
| Cost | When it applies | Note for natural gas |
|---|---|---|
| Spread | Every trade, at entry | Wider than oil in percentage terms; widest overnight |
| Commission | Depends on instrument and account type | Shown in the symbol specification in MetaTrader 5 |
| Swap / overnight financing | Positions held past the daily rollover | Depends on the provider’s financing method. |
| Contract rollover | Monthly | Adjustments can be large because gas futures for different months trade far apart. |
| Slippage | Fast markets, gaps, news | Frequent on the storage report and at the Sunday open |
Key risks
Extreme volatility. Moves of 5–10% in a day occur several times a year.
Weekend gaps. Weather forecasts change while the market is closed.
Rollover effects. Large price differences between contract months complicate longer holds.
Leverage. Position sizes suitable for currencies are far too large here. See position sizing and how leverage increases trading risk.
Risk warning. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, the products offered on this website may not be suitable for all investors because of the risk of losing all of your invested capital. You should never invest money that you cannot afford to lose, and never trade with borrowed money.
How to trade natural gas at Marketsall
Natural gas is listed as NGAS on MetaTrader 5 and Web Trader. Read the symbol specification for contract size, margin and swap rates before a first trade; how to read contract specifications on MT5 shows where they are. Practise on a demo account first, keeping in mind the differences covered in demo vs live accounts, and set the position size before opening the ticket with position sizing.
Frequently asked questions
Why is natural gas so volatile?
Demand depends on the weather, which changes quickly, while supply, storage and pipelines cannot adjust in the short term. Gas is costly to store and hard to transport, so there is little buffer. Small changes in the forecast therefore cause large price moves, often 3% to 5% in a day.
What is Henry Hub?
Henry Hub is a natural gas pipeline junction in Erath, Louisiana. It is the delivery point for NYMEX natural gas futures, and its price, quoted in US dollars per million British thermal units, is the benchmark for US gas.
What time is the natural gas storage report?
The US Energy Information Administration releases the Weekly Natural Gas Storage Report on Thursdays at 10:30 New York time, which is 14:30 UTC in summer and 15:30 UTC in winter. The time can shift around US public holidays.
What moves natural gas prices?
Weather forecasts are the main short-term driver. Storage levels relative to the five-year average, US production, liquefied natural gas exports and demand from power plants are the other main influences.
Are US and European gas prices the same?
No. Gas is priced regionally because it moves mainly by pipeline. The US benchmark is Henry Hub, Europe’s is the Dutch TTF and Asia uses a Japan–Korea marker. Liquefied natural gas shipments link the markets only partly, so prices can differ several times over.
Related reading
Understand rolls before holding gas
Anyone holding gas for weeks should know how contango turns the gap between contract months into a cost at each roll. The commodity trading guide explains the forward curve and works through a position that loses money while the price stands still.
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