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

Lesson 4 Introduction



Energy is being consumed at every hour of the day everywhere on earth. Thus, energy commodities are being bought and sold constantly to fill this demand. When we are talking about prices for the actual physical production and consumption of natural gas and crude oil, we are talking about the "cash" market. In this lesson, we will explore the ways in which cash prices are established in the physical marketplace, historical pricing, the main publications that report these prices, and the methodologies they use to collect the data.

Learning Outcomes

At the successful completion of this lesson, students should be able to:

  • identify key historical events of the natural gas “cash” market pricing, including price trends;
  • outline the methodology for cash price determination;
  • identify the relationship between futures and spot market prices;
  • describe the relationship between futures contracts expiring in different months;
  • explain the arbitrage and the situations in which arbitrage can be utilized;
  • locate and summarize the key industry pricing publications and their uses:
    • Platt's Inside FERC,
    • Platt's Gas Daily,
    • OPIS & ARGUS Price Reports for NGLs and Crude Oil.

What is due for this lesson?

This lesson will take us one week to complete. The following items will be due Sunday, 11:59 p.m. Eastern Time.

  • Lesson 4 Quiz
  • Lesson 4 activities as assigned in Canvas


If you have any questions, please post them to our General Course Questions discussion forum (not email), located under Modules in Canvas. The TA and I will check that discussion forum daily to respond. While you are there, feel free to post your own responses if you, too, are able to help out a classmate.