Natural Gas

Natural Gas Trading Enhances Portfolio Dynamics

Natural gas is a niche, yet worldwide market. The e360 natural gas hedge fund offers unique access to this commodity to yield returns uncorrelated with the S&P 500, making natural gas very valuable to your robust, diversified portfolio.

Trading Natural Gas in Worldwide Markets to Secure Uncorrelated Returns

The e360 hedge fund has been a large participant in the global natural gas market since 2009.

Our three traders have a combined 70 years of experience in managing natural gas portfolios. Because this market is niche and difficult-to-access, experts in the industry are rare. Three experts at the same hedge fund is practically unheard of. With such expertise along with a portfolio entirely composed of energy and power assets, e360 Power is uniquely poised to capitalize on the Energy Transition and deliver uncorrelated returns.

Unique Characteristics of the Natural Gas Market

Pipelines Connect Region to Region

Production of natural gas primarily takes place in Texas (24%), Pennsylvania (21%), and Louisiana (10%). From there, the gas is distributed throughout the country by a vast network of pipelines.

Bottlenecks Between Supply and Demand

Natural gas production cannot quickly and flexibly respond to changes in demand, often leaving an imbalance between supply and demand that we try to capitalize on.

Advent of Shale Gas

Prior to the development of shale gas production, the United States was a growing natural gas importer. The production of shale gas, through horizontal drilling and hydraulic fracturing, has made the U.S. the world’s largest natural gas producer.

Cleaner Fossil Fuel

Combustion of natural gas emits half the carbon dioxide as coal and 30% less than oil. Gas matches the other fossil fuels in reliability, but does so without the same environmental detriment.

Natural Gas Markets We Work With

Map courtesy of the EIA

Natural gas pricing location
Electricity pricing location

Global Reference Hubs

North America (Henry Hub)
Europe (Dutch TTF)

North American Regional Basis Markets

TETCO M3
Transco Z6
Dominion South
SoCal Border
AECO
NWP Rockies

Houston Ship Channel
Waha
Chicago CG
Transco (Station 85)
San Juan

Instruments & Focus

The e360 Power portfolio consists only of exchange-cleared contracts. We do not trade over-the-counter contracts, so we minimize counterparty risks and eliminate internal evaluation methods. We primarily trade futures and options on futures which expire in 24 months, however, we are capable of going out a full 4 calendar years.

LNG Market

LNG, or liquified natural gas, is a natural gas that has been cooled to a liquid state for shipping and storage. This liquefaction process makes it possible to transport natural gas to places where pipelines do not reach. Most LNG is transported by LNG carrier ships, and then regasified at import terminals. The expansion of LNG over the past 10 years has united natural gas markets globally.

North America

As the largest natural gas producer, North America exports up to 15% of its net production. The primary destination for exports are Europe and Asia.

Europe

The natural gas trading hubs in Europe are the Dutch TTF and the UK NBP. Imports to Europe are primarily from the U.S. and Russia (before the Ukraine invasion).

Asia

The primary gas trading hub is Japan’s JKM. Many exporters compete to sell into Asia.

Start investing with e360 Power!

To learn more about our involvement with the natural gas market, the uncorrelated nature of our returns, and our performance compared to other hedge funds, please contact us here (link to contact us page).