EME 801
Energy Markets, Policy, and Regulation

Lesson 10 Overview



This lesson will introduce you to the global markets for the petroleum commodities (crude oil, refined products, and natural gas). These commodities, along with coal, are commonly called fossil fuels. The inherent value of these fuels comes from their relative ease of transportation, their energy density, and their ability to be inventoried and dispatched as needed to meet demand. These characteristics should always be kept in mind when trying to understand the challenges associated with a transition away from fossil fuels.

There is a great deal of complexity in the world of petroleum markets. There are entire 3- and 6-credit courses offered on the subject. We will cover a lot of ground in this single module. There is also supplementary material from the previous iteration of EME 801 (written and developed by Dr. Seth Blumsack) which is attached as an appendix. You are strongly encouraged to read this material and digest it, as further background on energy markets provides great insight to inform decisions that each of you will be called on to make.

Learning Outcomes

By the end of this lesson, you should be able to:

  • Discuss topics related to national and global markets for petroleum and natural gas
  • Use the NYMEX (CME Group) website to construct a forward curve for crude oil, refined products and natural gas
  • Identify the role that the “Henry Hub” plays in North American natural gas pricing
  • Define “wellhead” and “citygate” prices for natural gas, and explain why these prices are usually different
  • Calculate correlations between natural gas prices in different regions of the United States, using data from the Energy Information Administration
  • Develop the Fossil Fuel Market Sensitivities section of your project 

Reading Materials

Aside from the online materials, you will need to access the websites of the EIA and NYMEX (CME Group).

What is due for Lesson 10?

This lesson will take us one week to complete. Please refer to the Course Calendar for specific due dates. See the specific directions for the assignments below.

  • Complete all of the Lesson 10 readings and viewings, including the lesson content
  • Participate in the Zoom discussion
  • Project work: Fossil Fuel Market Sensitivities


If you have any questions, please post them to our Questions? discussion forum (not email). I will not be reviewing these. I encourage you to work as a cohort in that space. If you do require assistance, please reach out to me directly after you have worked with your cohort --- I am always happy to get on a one-on-one call, or even better, with a group of you.