Natural Gas Hedging Strategy

In: Business and Management

Submitted By blue124sky
Words 9155
Pages 37
UNDERSTANDING
NATURAL GAS MARKETS

Table of Contents

PREVIEW Overview ...................................................................... 2 The North American Natural Gas Marketplace ............... 4 Natural Gas Supply ....................................................... 8 Natural Gas Demand ................................................... 12 Natural Gas Exports .................................................... 15 How Natural Gas is Traded .......................................... 16 Conclusion: A New Era For U.S. Natural Gas Markets ... 20 Glossary ..................................................................... 20 References ................................................................. 23

Understanding Natural Gas Markets
Overview Natural Gas is an Important Source of Energy for the United States.
Natural gas is an attractive fuel because it is clean burning and efficient, and ample supplies of natural gas are available from domestic resources. Recently, natural gas production in the U.S. has increased substantially due to technological advancements in natural gas extraction methods. This increased production has displaced traditional supply sources and resulted in reduced prices for natural gas consumers. The prospect of ample natural gas supplies, continued low prices, and the favorable environmental and economic position of natural gas-fired electric generation plants are leading to expectations of growing U.S. demand for natural gas, especially in the electric and industrial sectors, and potentially for export as liquefied natural gas1 (LNG). The increases in U.S. natural gas production have come from unconventional shale gas resources, which have become more accessible and economic due to advancements in horizontal drilling and hydraulic fracturing. These technological advancements have resulted in domestic production…...

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