Dealing with a volatile gas market

Eric Fishhaut explores the current state of volatility within the US natural gas market and outlines how hedging with 'strips' can be used to secure long-term prices that are variable, but known

The price of natural gas in the US going into this winter has retreated substantially from last year's surge due to hurricane impact, but the underlying factors that lead to price spikes and price volatility remain. Demand continues to increase, while traditional supply sources of natural gas are declining in productivity and production costs are increasing. As volatility has grown, trade within the natural gas markets has attracted an increasing number of financial entities, which arguably has