Natural gas market tempts hedge funds

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Brighter outlook for natural gas prices tempt hedge funds

Names such as Amaranth Advisors serve as a warning to those who bet big in this market. The Greenwich, Connecticut-based hedge fund imploded in 2006 after racking up more than $6 billion in losses on large bets in the natural gas market.

For many years volatility was a permanent feature of the natural gas market. During the winter of 2000-01, the main US benchmark price, Henry Hub, spiked to $10 per million British thermal units (Btu), after having previously fluctuated around $2 per million Btu.

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