Natural Gas Storage and Markets

This deep dive discusses natural gas storage in the United States, explaining its purpose in balancing supply and demand across seasons due to steady production but fluctuating needs. It details different types of storage facilities, primarily underground in depleted reservoirs, aquifers, and salt caverns, each with distinct operational characteristics like deliverability and cycling capability. The text also explores the natural gas market, highlighting its competitive nature, the role of various marketers in connecting producers and consumers, and how physical trading occurs through different contract types and pricing mechanisms like spot markets, bidweek, and index prices. Finally, it touches upon the significant financial market for natural gas, where derivatives are used for speculation or hedging against price volatility, often outweighing the volume of physical trading.