Oil and Gas Analytics

UK NBP Natural Gas Futures

Natural Gas prices in the UK are commonly referenced to the UK National Balancing Point (NBP) price. In this model, gas anywhere in the national transmission system within the UK counts as NBP gas which allows simplification of trading as buyers and sellers are united in the same marketplace.
The ‘futures price’ of an asset is the price of entering into a contract today to buy or sell the asset on some agreed future date. The set of prices for all future dates is then called the ‘futures curve’. The futures curve is not a forecast of future spot prices by the market. A commodity futures contract is a binding agreement that gives one the right to purchase that commodity at a predefined price on a predefined date in the future. Under a futures contract, both the buyer and the seller are obligated to fulfil their side of the transaction on the specified date. The futures curve shows the price at which it is possible to buy/sell futures contracts for a forward date at a price agreed today (or on a particular date in the past).