Henry Hub is a key pricing point and trading hub used to forecast and track gas prices in the United States. It is the most widely quoted benchmark of natural gas prices in the United States, and it serves as the basis for the majority of natural gas contracts and transactions that occur in the U.S. The point goes by various names, such as the "Henry Hub Natural Gas Price", the "New York Mercantile Exchange (NYMEX) Henry Hub Natural Gas Price," or the "Henry Hub Spot Price."

Henry Hub is an important reference point in the North American natural gas market. The hub is named after the Henry E. Wailes gas facility in Erath, Louisiana, located in the Parish of Vermilion. It's situated at the intersection of gas pipelines from the major natural gas producing regions in the U.S. Gulf Coast and Gulf of Mexico. As such, the Henry Hub facilitates the delivery and purchase of natural gas throughout the United States.

The Henry Hub benchmark is used by domestic producers and consumers of natural gas who need a price reference point for trading. It is established through transactions, bids and offers posted on the Intercontinental Exchange (ICE) and registered with the Commodities Futures Trading Commission (CFTC). The transactions occur as part of the end of day settlement process. Prices are the weighted average of weighted median of all transactions occurring at Henry Hub on a given day, and that weighting will vary with the amount of gas traded. It is important to note that the Henry Hub price includes the transportation cost component, which is the fee charged to physically transport the gas from its source to its final destination.

Henry Hub serves as the basis for many North American gas contracts and derivatives. In the continental United States, numerous delivery zones, pipelines and traders use Henry Hub as the reference for their daily transactions. There are numerous other pricing points throughout the United States, including the Chicago City Gate, Dominion South and other hubs, but none have the same standing in the industry as Henry Hub does.

The Henry Hub is a cornerstone of the natural gas industry and its importance is only becoming more evident. As the demand for natural gas rises, the importance of reliable pricing points likewise reaches greater heights. By providing a key point of reference and price discovery, Henry Hub helps keep markets efficient and helps energy companies make better decisions to optimize their business. Without an independent, reliable index such as Henry Hub, the natural gas market would be considerably less fluid.