Physical and Financial Natural Gas Markets

Disciplines: Management | Production and Operations | Projects, Facilities and Construction

Course Description

This course will present an overview of the key differences between physical natural gas and derivatives such as futures, swaps, and options, as well as their markets. Attendees will review natural gas market basics, including terminology, concepts, and the mechanics of trading physical natural gas and natural gas derivatives. They will discuss the role of NYMEX Natural Gas Futures Contract in determining the value of physical natural gas in the U.S. The instructor will cover the use of natural gas price indices, fixed price, and physical basis deals in selling and purchasing physical natural gas. He will address major trends on how sellers and purchasers are pricing physical natural gas. Attendees will also cover price discovery of physical natural gas, liquidity and clearing and the key difference between physical and financial natural gas markets in the U.S. and the regions where the course is taught. The instructor will also cover how financially hedge natural gas supplies and prices using futures, basis, and index swaps, and options and when producers/sellers and purchasers should use them, The course will also cover the FERC's oversight of physical natural gas and as well as CFTC's oversight of natural gas derivatives.

Course Objectives

Attendees will gain a comprehensive understanding of the differences between physical and financial natural gas markets. Attendees will also learn how to price physical natural gas and how and when to use natural gas futures, swaps, and options to hedge price and geographical price risks when selling or buying natural gas.

Learning Level

Introductory to Intermediate

Course Length

1 Day

Why Attend

This course will take the mystery out of how physical and financial gas markets work and influence decisions on natural gas drilling, gathering, processing and construction of pipelines and liquefied natural gas regasification and liquefaction plants. It will also distinguish hedging from price speculation in natural gas.

Who Attends

New and experienced staff and managers who want to learn how natural gas physical and financial markets work and how they influence natural gas production, processing and other investments in the natural gas supply chain. Attendees will learn how to hedge and monetize natural gas assets from price risks. Attendees should come with a basic understanding of the natural gas supply chain.


0.8 CEUs (Continuing Education Units) are awarded for this 1-day course.

Cancellation Policy

All cancellations must be received no later than 14 days prior to the course start date. Cancellations made after the 14-day window will not be refunded. Refunds will not be given due to no show situations.

Training sessions attached to SPE conferences and workshops follow the cancellation policies stated on the event information page. Please check that page for specific cancellation information.

SPE reserves the right to cancel or re-schedule courses at will. Notification of changes will be made as quickly as possible; please keep this in mind when arranging travel, as SPE is not responsible for any fees charged for cancelling or changing travel arrangements.

We reserve the right to substitute course instructors as necessary.


Tom Russo is an Energy and Environmental expert with unique regulatory skills in natural gas and liquefied natural gas infrastructure, hydropower, NEPA environmental impact assessment, energy markets, prices, and physical/cybersecurity.

Before founding Russo on Energy LLC in May 2015, Mr. Russo worked for over 30 years as a Manager and Sr. Energy Industry Analyst at the Federal Energy Regulatory Commission (FERC).

Mr. Russo teaches Global Energy Security, Global Energy Markets and International Energy & Environmental Regulation at the Elliot School of International Affairs at the George Washington University in Washington DC. He also writes a bimonthly Energy and Environmental column for the Natural Gas and Electricity Journal.

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