Natural Gas Physical and Financial Markets

January 25, 2022 | Online :: Central Time

0122-natural-gas-markets

“Very helpful, patient, and made course material easy to understand for someone new to the industry like myself.” –New York Power Authority

“This was the perfect introduction to Physical & Financial Markets. I learned so much, and it got me excited to learn even more.” – Williams

This course will present an overview of physical and financial natural gas markets. Attendees will review natural gas market basics, including terminology, concepts, and the mechanics of physical natural gas trading and go in-depth on the role of NYMEX Natural Gas Futures Contract in determining the value of physical natural gas. The agenda will also cover gas indices, fixed price, and physical basis deals, and we will address major trends on how sellers and purchasers price physical natural gas. Attendees will gain an understanding of where to find price information, what affects prices, and the role of the natural gas index publishers. They will leave the course with the ability to assess the importance of liquidity in physical natural gas markets and review considerations used to determine whether or not to hedge. The course will discuss the role of FERC, the Commodity Futures Trading Commission (CFTC), states, and other participants in regulating natural gas markets. The course will conclude with a discussion regarding where natural gas markets are headed.

The intent is for participants to be able to apply the information learned the first day they return to their jobs. Hands-on activities will be included throughout the day.

Learning Outcomes

• Discuss an overview of physical and financial natural gas markets and their key differences
• Explain the role of NYMEX Natural Gas Future Contract in determining the value of physical natural gas
• Review natural gas market basics (terms, concepts, mechanics of physical natural gas trading)
• Express where physical natural gas can be bought and sold
• Discuss gas indices, fixed price, and physical basis deals
• Address major trends on how sellers and purchasers price physical natural gas
• Describe where to find price information and what affects prices
• Explain the role of the natural gas index publishers
• Assess the importance of liquidity in physical natural gas markets
• List the major players of physical natural gas markets
• Review considerations used to determine whether or not to hedge
• Describe the role of FERC, the Commodity Futures Trading Commission (CFTC), states, and other participants in regulating natural gas markets
• Discuss where natural gas markets are headed

Tuesday, January 25, 2022 : Central Time

Introduction

Geopolitics and Social Media

Where are natural gas prices headed?

Crude oil, NGL, and gas production effects

Gas processing and pipeline constraints

U.S. exports to Mexico and global markets by LNG companies

Other Drivers of Natural Gas Prices

Weather

Storage

Infrastructure constraints

Physical & Financial Natural Gas Markets

Regional gas markets

NYMEX Natural Gas Futures Contract at the Henry Hub

Global natural gas benchmarks

Kinds of Transactions

Forwards

NYMEX and ICE look-alike futures

• Contract specifications
• Key differences

Clearing

Liquidity

Comparing forwards and futures

 

Physical Natural Gas Pricing and Indexes

Fixed price deals

Daily index prices

Monthly index prices

Price reporting agencies (Platts, NGI, Argus, ICE)

How indexes are calculated

Physical Natural Gas: Buying and Selling

Where can physical natural gas be bought and sold

How and when indexes are used to price gas

What is Bidweek?

• What happens during Bidweek
• Settlement of prompt month NYMEX Gas Futures contract

Daily gas (next day gas), Intraday (same day gas), and Weekend gas

Buying and selling physical gas using index, fixed price, and physical basis

Pricing long-term sale and purchase of gas

Firm and interruptible pipeline transportation nominations

Natural Gas Basis

What is basis?

Using basis when buying and selling gas

Natural Gas Market Basics & Terms

Bulls and Bears

Going Long and Shorting the Market

What buying and selling futures means

Open Interest & CFTC Commitments of Traders Report

Hedging with Physicals and Futures

What is hedging

Hedging and risk management

Financial hedges

To hedge or not to hedge- and how much?

Long Hedgers and Short Hedgers—determining your natural position

Hedging for natural gas producers and purchasers with examples

Hedging with Natural Gas Options

Definition of options and why they are popular

Anatomy of an option

Buying and selling options

Call options vs Put options

Hedging with gas options

Speculating with options

Example of how to hedge with options

Using Natural Gas Swaps to Hedging Basis

Why hedge basis?

Defining swaps

Basis swaps

Index swap

Swap dealers

Key differences between futures and swaps and related costs

Natural Gas Markets: Regulatory Perspectives

Who’s watching the natural gas markets for manipulation?

FERC, CFTC, States, and ISOs and RTOs

What gets FERC’s attention in the natural gas markets?

How FERC performs oversight and surveillance of the natural gas markets

FERC’s hotline and its role in preventing market manipulation

Fines and penalties

Tom Russo, Principal, Russo on Energy LLC

Tom Russo is an Energy and Environmental expert with unique FERC regulatory skills in siting hydropower, natural gas and liquefied natural gas infrastructure, NEPA environmental impact assessment and in how energy markets, prices and physical/cybersecurity affect infrastructure investments.

Prior to founding Russo on Energy LLC in May 2015, Mr. Russo worked for over 30 years as a Manager and Sr. Energy Industry Analyst at the Federal Energy Regulatory Commission (FERC). During that time, he amassed experience in hydropower licensing, NEPA environmental impact assessment of energy projects, business process reengineering, and natural gas and crude oil market oversight. Mr. Russo thoroughly understands the Natural Gas Act, Natural Gas Policy Act, Federal Power Act and Energy Policy Act as they apply to natural gas and hydroelectric projects.

He is very active in hydropower and natural gas matters and writes an Energy and Environmental column for the Natural Gas and Electricity Journal. He also co-authored for the R Street Instiute entitled “Ebbing the flow of hydropower red tape.”

Mr. Russo is a native of Brooklyn, New York. He earned a credential as a Certified Information Systems Security Professional (CISSP) in 2010. He also graduated with a MBA in Finance from the George Washington University and a MS in Biology from the University of Alabama.

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.

You will receive a meeting invitation will include a link to join the meeting.

Separate meeting invitations will be sent for the morning and afternoon sessions of the course.

• You will need to join the appropriate meeting at the appropriate time.

If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.

The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

REGISTER NOW FOR THIS EVENT:

Natural Gas Physical and Financial Markets

January 25, 2022 | Online

Buy 4 seats and only pay for 3! For this event every fourth attendee is free!

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before December 17, 2021 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 0.7 CEUs for this event.

Requirements for Successful Completion of Program

Participants must log in each day and be in attendance for the entirety of the course to be eligible for continuing education credit.

Instructional Methods

Case studies, PowerPoint presentations, classroom exercises