Columbia Gas M-U Trading Hub Now Untethered from NYMEX

The price of natural gas traded at the Henry Hub (HH) in Southern Louisiana is THE benchmark price used for the entire industry in the U.S. All other prices are compared to the HH. The HH serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX). The hub is owned by Sabine Pipe Line LLC and has access to many of the major gas markets in the United States, hence its use as the benchmark. A major trading hub in the Marcellus/Utica, Columbia Gas, tended to follow the HH, rising when HH went up and falling when HH lost value. It's never a one-to-one correlation, but it's close. That is, until the past year, when, according to analysts with Argus Media, the Columbia Gas trading hub became "untethered" from the HH.

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