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What are natural gas prices?
There are different types of natural gas prices that are quoted in the market and it's easy to be confused by the terminology. Generally speaking, when someone refers to the price of natural gas, they are referring to either the spot price or the futures price. The spot price refers to the cash price of the physical commodity for immediate delivery while the futures price represents the price of a financial contract for delivery at some point in the future.
If someone is referring to the price of natural gas in general terms, they are probably also referring to the price at a trading point in South Louisiana called the Henry Hub, which serves as a proxy for the US gas market. The Henry Hub is the trading location on which the NYMEX natural gas futures price settles.
Henry Hub isn't the only natural gas trading location though. Natural gas is not a global market with trading points in many different countries. Within the United States, there are more than 150 regional natural trading locations or hubs which the market uses to quote prices specific to the supply and demand balance of their local market.