Natural gas prices: MMBtu, volume and contracts

Understand natural gas energy and volume units, Henry Hub contracts and heat-content assumptions. Convert an illustrative price from USD/Mcf to USD/MMBtu.

GuideBy Narwhal API4 min read
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Begin with the hub and delivery period

A natural gas quote refers to a location or market and a period. The standard Henry Hub futures contract uses 10,000 MMBtu and has physical settlement. Its month is part of the instrument identity.

A regional delivered quote may include transport and local supply conditions. A futures settlement, a spot observation and a household tariff have different terms. Label the series clearly before comparing their values.

For each row, retain hub, currency, unit, price type, observation time and delivery period. If you calculate an equivalent price, retain the heat-content factor and its source alongside the result. That makes the transformation reproducible.

Energy and volume are different measurements

MMBtu measures energy. Cubic feet measure volume. Gas composition affects the energy released by a given volume, so a volume-to-energy conversion needs a stated heat-content factor. Volume readings also need compatible reference conditions.

EIA’s conversion guidance divides a price per thousand cubic feet by the number of MMBtu in that thousand cubic feet. Use the factor applicable to your observation. An annual average from another market should not silently replace it.

  • MMBtu: one million Btu of energy.
  • Therm: 100,000 Btu, or 0.1 MMBtu.
  • Mcf: one thousand cubic feet of gas volume.
  • Heat content: energy per volume, with a source and applicable conditions.

Worked example: USD/Mcf to USD/MMBtu

Assume, for this illustrative example, a price of USD 3.09 per Mcf and heat content of 1.03 MMBtu per Mcf. Dividing 3.09 by 1.03 gives USD 3.00 per MMBtu. The volume unit cancels.

The assumed heat content is not a universal constant. If it is missing, leave the energy-equivalent price uncalculated. Preserve the original quote and show the missing assumption.

The Commodity unit converter supports mass and container-payload calculations, not gas energy or volume. The worked example above provides the gas formula.

Worked example: illustrative prices
Price: 3.09 USD/Mcf
Assumed heat content: 1.03 MMBtu/Mcf
Energy price: 3.09 ÷ 1.03 = 3.00 USD/MMBtu

Contract value uses the energy quantity

At an illustrative USD 3.00 per MMBtu, a standard 10,000-MMBtu Henry Hub contract has a notional value of USD 30,000. This calculation uses the contract’s energy quantity and does not require a cubic-foot conversion.

Notional value is separate from margin. Keep the contract size and month attached to a futures quote; a smaller contract can have the same per-MMBtu quote but a different total exposure.

Read prediction market odds for the daily close

Narwhal shows what prediction markets expect for the natural gas price at a daily close, with a middle estimate and an 80% range. The odds are delayed by 15 minutes. These are market odds for a closing price, not a price feed.

Sources and references

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