The NYMEX, which we heavily refer to in most if not all of our blog posts, refers to the New York Mercantile Exchange. This is essentially the equivalent of the Toronto Stock Exchange (TSX), only opposed to being a public market place for stocks, it’s a public market place for commodity products such as natural gas. Each transaction (i.e., Sale or purchase) conducted on the NYMEX is recorded and released, which allows for live pricing and charts to be generated immediately.
The NYMEX Henry Hub Natural Gas Futures Contract is known as the benchmark for natural gas pricing throughout North America. When we refer to a futures contract, it essentially means that we are looking to transact today for a later month, as opposed to for the current month. A parallel example that might help? Consider an Amazon subscription service where you transact today to lock–in the price of one bottle of laundry detergent for each month starting in March 2022 onward. That’s what we’re doing at RiteRate to ensure we can secure fixed price natural gas agreements for our customers!