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

Lesson 3 Activities


Pricing Activity

The NYMEX is actually owned by the Chicago Mercantile Exchange (CME Group). Links to their energy commodity prices (Henry Hub Natural Gas Futures and Light Sweet Crude Oil (WTI)) can be found in the course "Resources" box on the Main course page, not Canvas. Using those links, look-up the prices for both crude oil and natural gas futures for delivery in the closest month to the present time. Although you won't see this terminology on the NYMEX web site, the futures contract for delivery in the closest month to the present calendar month is called the "front month" contract. Report the "Last," "Change," and "Prior" prices, and also report the volumes for both the crude oil and natural gas front month contracts. Please include a screen shot of the NYMEX web site that you used for crude oil, and a screen shot for the NYMEX web site you used for natural gas.

Grading Criteria

This activity is worth 20 points, as per the EBF 301 grading scale in the syllabus.

Fundamental Factors Activity

Part of the overall objective of this course is to have you understand how the market functions in terms of determining price and how it trades in general. To truly appreciation this, you have to begin to think like an energy commodities Trader. To do so, you must consider the market factors that they research before making any Buy/Sell decisions.

In Lesson 2, you were presented with a number of “fundamental” factors that can influence the price of crude oil and/or natural gas.

Beginning this week continuing until further notice, you will submit Fundamental Factors assignments in the respective Lesson in Canvas each week by 11:59 p.m., Eastern US Time, on Sundays. Instructions for the Fundamental Factors assignments can be found under the "Resources" section of the EBF 301 web site.

You are to submit ALL of the same fundamental factors for both crude and natural gas shown in Lesson 2 and give your opinion on how they impact prices for oil and natural gas. Fundamental Factors assignments should be submitted to the Fundamental Factors Drop Box on Canvas for each week.

Grading Criteria

A detailed grading rubric for the Fundamental Factors activities is available under the "Resources" section of the EBF 301 course web site.

An example of a complete answer would be:

Natural Gas

The Energy Information Agency’s Weekly Natural Gas Storage Report (http://ir.eia.gov/ngs/ngs.html) showed an injection of +50 Bcf. This was below the expectation of +60 Bcf, therefore, it was seen as “bullish” since less supply was put into storage implying that demand was higher than expected. Prices would increase under this scenario. Total gas in storage now stands at 1.5 Tcf which is below the 5-year average as well as, last year at this time.

Submitting Your Work

Pricing Activity: Submit your findings as a single word processed document to the Activity Drop Box in Canvas.

Fundamental Factors: Submit your work as a single word document and to the Lesson 3 Fundamental Factors Activity in Canvas.