history

Today is a sad day for the world of oil tankers. Unless a miracle happens by 10 a.m. local time at the Hawaii Department of Transportation's Harbors Division, the last surviving iron-hulled, sail-driven oil tanker is headed to Davy Jones’ Locker. The once-proud, four-masted, 143-year-old windjammer will soon be scuttled by deliberately sinking her at sea off the shores of Honolulu. How could things have come to this? In today’s blog, we’ll take a trip down memory lane to explore how a spectacular, fully rigged oil tanker could have survived for so long, plying the oceans for this author’s former employer, only to be betrayed in her final years.

The Henry Hub is the best known natural gas trading location in the world.  There is certainly no more liquid point in the industry.  An average of almost 400,000 natural gas futures contracts trade there each day.  The Henry price is used to compute location ‘basis’ at all other natural gas trading points in North America and thus is the reference price for tens-of-thousands of derivative instruments and other commercial contracts.  In effect, the Henry Hub is the center of the natural gas trading universe. What if I were to tell you that Henry Hub is not a hub?  It is not all located at some single spot you can drive by called Henry.   And the gas flow through this so called hub is minimal.  Could this be another LIBOR scandal where a benchmark is not what we thought?  Or is all well and good at Henry, regardless of these revelations?  Let’s find out why Henry is the Hub, why it developed the way it did, and how changes in gas flows from the big shale plays could impact Henry in the future.