Low US natural gas prices stir hedging talk
As the boom in North American shale gas production continues to feed an oversupplied market, US natural gas prices sank to 10-year lows last week. Gas consumers are taking a serious look at seizing the opportunity to lock in prices — but remain hesitant to pull the trigger because of elevated forward prices
The Nymex prompt-month Henry Hub futures contract settled at $2.324 per million British thermal units (MMBtu) on Friday, a rebound from the day before, when it closed at $2.272/MMBtu, a settlement price not seen since 2002.
Still, according to market participants, utilities and other end-users remain reluctant to hedge because forward prices are not as favourable. Henry Hub futures expiring in April 2013 settled at $3.350/MMBtu on Friday, while those expiring in April 2014 settled at $3.773
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