EBF 301
Global Finance for the Earth, Energy, and Materials Industries

Lesson 5 Activity

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Cash Price Activity

Familiarize yourself with one of the industry publications that reports physical, cash prices for natural gas. Inside FERC, Gas Daily and, OPIS do not allow their publications to be copied unless you have a subscription and receive prior permission. However, you can access natural gas cash prices from the Natural Gas Intelligence website. These come directly from the electronic trading platform The Intercontinental Exchange (ICE). They are actual transactions for physical natural gas trades at the specified locations. ICE is based in Atlanta, GA. and they also own the ICE Futures Europe in London.

Important Note

You might not be able to access the latest natural gas cash prices through NGI. In that case, use the sample prices provided in the NGI website and include a screenshot in your submission. 

The cash hubs that you might see in the report are:

  • EAST - "Transco Z6 (NY)" - this is the price of gas delivered to NYC.
  • GULF/TEXAS - "Henry" - this is the physical delivery point for financial natural gas futures contracts (Lesson 3)
  • GULF/TEXAS - "Houston Ship Channel" - this is the price of gas delivered to the huge petrochemical refining corridor east of Houston (Lesson 3).
  • MIDCONTINENT - "NGPL Midcont" - this is the price for gas in Western OK and the Texas Panhandle. It is also the area we used in Lesson 5 as an example for transportation costs.
  • WEST - "SoCal Border" - this is the price of gas delivered to the border of California for Southern California Gas Company ("SOCAL"), the country's largest LDC.
  • WEST - "Waha" - this is a major pipeline "hub" in West TX (recall the national pipeline grid which shows pipes intersecting one another), which reflects Texas demand as well as demand in NM, AZ and CA.
  • WEST - "Kingsgate" - this is an import point for Canadian gas.

Please chose four of these hubs. Report the following information for the selected four hubs and the national average (last row): 

  • "Range" - the high and low price traded on the day.
  • "Volume (mmbtu)" - the total amount of gas traded at that location that day (in thousand MMBtus).
  • "# Trades" - the total number of transactions at that location.

    Please also include a screen shot or PDF printout of the Natural Gas Intelligence website to verify your reported prices. Do not simply submit a screen shot of the web site. You must submit both the screen shot and a typed response with your reported prices.

    The Natural Gas Intelligence website is a great resource for when you work on your weekly Fundamental Factors for natural gas. You can indicate where cash prices are trading, and that may help you with your trading decisions.

    Grading

    This activity, due at 11:59 pm on Sunday, is worth up to 20 points on the EBF 301 grading scale. 

    Fundamental Factors

    The Fundamental Factors activity is due as usual this week, at 11:59 pm on Sunday, and is worth 30 points on the EBF 301 grading scale. Please refer to the Fundamental Factors Instructions for additional information and grading rubric.

    Submitting Your Work

    Cash Price Activity: Submit your work as a word processed document to the Lesson 5 Cash Price Activity in Canvas.

    Submit your work as a single word processed document to the Lesson 5 Fundamental Factors Activity in Canvas.