New York Mercantile Exchange Natural Gas Futures Functional Empirical Research

To build the futures market of natural gas has attracted increasing attention with the growing tension of the relationship between supply and demand of energy and the continuous deepening of the reform in the market of natural gas industry. The futures market is an advanced pattern and it has some basic functions such as price discovery and hedge and other derivative functions. Because of the same characteristics between China's natural gas market and that of America, research of the functions of the futures market of natural gas of New York Mercantile Exchange has significant guiding implications for the setting up of such a market in China.Firstly in the paper the process of establishing the futures market of natural gas in New York Mercantile Exchange, market conditions at that time and its trade of the futures of natural gas were introduced.Then using some econometrics tools and through some concrete evidence, the author tested the basic functions and derivative functions of futures market of natural gas in New York Mercantile Exchange. The findings bore out the fact that the futures market of natural gas of New York Mercantile Exchange has some basic functions such as price discovery and hedge and some derivative functions such as slowing down the fluctuation of spot price and accelerating the development of natural gas industry.Finally, the same characteristics between our natural gas market and that of America were expounded. On the basis of the functions of the futures market of natural gas in New York Mercantile Exchange, implications were drawn for the establishment of China's futures market of natural gas, particularly in its importance and approaches.