Today, natural gas is a commodity that is bought and sold in a competitive market where prices reflect supply and demand relationships. The natural gas supply industry is highly competitive with many participants. There are thousands of natural gas producers. The five top natural gas producers represented only 20 percent of the U.S. market demand in 2000. Most of the remaining natural gas supplies are transported from neighboring Canada via reliable pipelines.
Natural gas is a commodity.
Like other commodities, natural gas is traded in an open market at market hubs. These hubs act as marketplaces where hundreds and even thousands of buyers and sellers of natural gas electronically come together. Natural gas price movements occur as the supply and demand cycles interact. Supply is tight. Because of lag times inherent in matching supply with increased demand, supplies have become tight.