You've got a referral, a first-round commercial analyst interview on a gas desk, and one question you can't shake: will they just talk, or will they hand you data and watch you think? One candidate put it exactly right in r/Commodities: how much of the interview is "what does x mean to the S/D balance or price" versus "being presented with data and expected to manipulate on the spot."
Either way, natural gas trading interview questions test the same thing. Not whether you memorized Henry Hub's history. Whether you can take a change in the world and walk it, out loud, through supply, demand, storage, and price — for the right hub and the right term.
By the end of this guide you'll have a five-step chain you can run on any "what happens to gas if…" question, and 25 practice questions with model answers to rehearse it on.
How to answer natural gas trading interview questions: the S/D balance chain
Desks hear a lot of "prices go up because demand goes up." That's a conclusion, not an answer. Walk the chain instead:
-
Which hub, which term? "Natural gas" isn't one price. Henry Hub prompt month, a summer strip, Waha basis, and Dutch TTF can move in opposite directions on the same headline. Say which one you're pricing before you say which way.
-
Which line of the balance moves? Supply (production, imports), demand (residential/commercial heating, power burn, industrial, LNG feedgas, exports to Mexico), and the plug: storage.
-
How big, and for how long? A two-day cold snap and a two-month one are different trades. Size it versus normal, and say whether it's a blip or a trend.
-
What does it do to storage versus the 5-year average? Storage is where the balance shows up. The market cares about the deficit or surplus against the 5-year average and against expectations, more than the raw number.
-
What's already priced, and what could break the logic? Positioning, the forward curve, and physical constraints (pipeline outages, freeze-offs, LNG terminal trips) can overwhelm the fundamentals. Name the risk to your own view.
You don't need the right answer to every question. You need to show you know what moves what — and where your reasoning could be wrong. Interviewers love that last step.
Weather and demand
1. A forecast turns 10 HDDs colder for next week across the Midwest and Northeast. What happens?
Hub/term: prompt month Henry Hub and Northeast/Midwest basis. Balance: residential and commercial heating demand rises; power burn may rise too. Storage: bigger withdrawals than expected, so the storage surplus shrinks (or deficit grows). Price: prompt likely rallies; constrained Northeast points can spike much more than Henry Hub. Risk: if it's a one-week shot in a well-supplied market, the back of the curve may barely move.
2. Same 10 HDDs colder — but in April instead of January. Is the answer the same?
No. In the shoulder season the absolute demand impact is smaller, storage is near its seasonal low point, and the market is looking ahead to injection season. You'd expect a smaller, shorter move. This is the "what catalysts do you foresee in April?" trap — timing matters as much as direction.
3. A hot summer forecast for Texas. Why would gas care?
Power burn. When air-conditioning load rises, gas-fired generation makes up a large share of the marginal power supply, so gas demand rises. Hub/term: Henry Hub summer contracts and Texas points. Storage: smaller injections than normal. Risk: strong wind or solar output can offset some of it.
4. Weather models flip warmer overnight. Who reacts first?
The prompt month and weather-sensitive points react first; traders reprice expected heating demand before any physical gas changes hands. Mention which models the desk watches (GFS, ECMWF, the CPC 8–14 day outlook) and that the market trades the change between model runs, not the forecast itself. (New to the models? See How to Trade Natural Gas With Weather Models.)
Supply
5. A winter storm causes freeze-offs in a major producing basin. Walk me through it.
Supply drops at exactly the moment demand spikes. Balance: production falls, demand rises — a double hit. Storage: large withdrawals. Price: day-ahead/cash prices at affected hubs can explode far more than the futures curve. This is the deliverability story: the gas exists in storage or underground, but can't get to where it's needed fast enough.
6. Production hits a new record. Bearish?
Usually, but ask: where is the growth, and can it get out? Growth in a basin with full pipelines can crash local prices (basis) while doing much less to Henry Hub. Also check whether demand (LNG, power) is growing faster. Then say what it does to the storage trajectory.
7. Associated gas from oil drilling rises because crude prices rallied. Does gas care?
Yes. Associated gas comes out of the ground as a byproduct of oil drilling, so it doesn't respond much to gas prices. More oil drilling means more gas supply regardless of the gas price. That's bearish for gas, especially for points near oil basins with tight takeaway capacity.
8. A new pipeline out of a constrained basin comes online. What moves?
Basis first: the local price in the basin should rise toward Henry Hub because the bottleneck eases. Downstream points may weaken as more gas arrives. Henry Hub itself may move less. The common mistake is to call it simply "bullish" or "bearish" without saying for which point.
LNG and global
9. An LNG export terminal trips offline for two weeks. What happens to Henry Hub?
Demand falls: feedgas that would have gone to the terminal stays in the US system. Balance: looser. Storage: bigger injections (or smaller withdrawals). Price: bearish Henry Hub and nearby Gulf Coast points. Globally: bullish TTF/JKM, since less US LNG reaches the market.
10. Global LNG prices spike on a Middle East supply scare. Why might Henry Hub not move?
Because US export capacity is the bottleneck. If terminals are already running near capacity, higher overseas prices can't pull more US gas out of the country. The extra value accrues to whoever holds the export capacity, not to Henry Hub. This is the "why isn't nat gas moving like oil" question, and the answer is "which hub?" — the global benchmarks moved.
11. A new LNG terminal starts commissioning. How do you think about the next six months?
Demand ramps up gradually through commissioning, not all at once. Hub/term: Gulf Coast points and the forward curve over the ramp period. Storage: smaller injections as feedgas grows. Risk: commissioning delays are common, so the market fades or prices in the start date.
Storage
12. The EIA storage report shows a 90 Bcf injection versus a consensus of 75. What does it mean?
The balance was looser than the market thought. It's not "90 is a big number" — it's 15 Bcf more than expected. Price: typically bearish at the 10:30 ET Thursday release. Follow-up: was it weather (temporary) or a structural loosening (more production, less demand)? A structural miss matters more. (Where to read the report and the 5-year comparison for free: The “Zero-Budget” Data Stack.)
13. Storage is 10% above the 5-year average heading into winter. How does that shape your view?
There's a cushion, so it would take a colder-than-normal winter to tighten things meaningfully. That usually weighs on winter prices and on the volatility the market is willing to pay for. Risk: the cushion is national; a regional deliverability problem can still cause local price spikes. For one region's version of this story, see how the Delta's storage fields move PG&E Citygate in The Gas Under Mt. Diablo.
14. What is the end-of-October storage number, and why do people care?
It's roughly the end of the injection season — how much gas the system enters winter with. It frames how much risk winter weather carries. Watch the trajectory toward that level all summer.
15. Why does the market care more about storage versus the 5-year average than the absolute number?
Because storage is seasonal. A given level is high in March and low in October. Comparing to the 5-year average (and last year) strips out the season and shows whether the balance is tighter or looser than normal.
The curve and term structure
16. The winter strip is trading well above summer. What does that tell you, and who benefits?
The market is in contango from summer into winter. It's paying for storage: someone can buy summer gas, inject it, and sell it forward in winter. If the spread is wider than the cost of storage, storage owners and traders lock in that value. As one trader on Elite Trader put it, the spread "is the cost of storage. It's something real."
17. A warm December. What happens to the prompt versus the rest of the curve?
The prompt month falls most; it's directly exposed to near-term demand. Later contracts fall less, especially if the market still worries about January–February. So the curve shape changes, not just the level.
18. You think the market is too bullish on summer. How would you express that without betting on the whole curve?
A spread — for example, short summer against long winter, or a specific month against another — instead of an outright short. It isolates the view and reduces exposure to things you don't have a view on. Saying "I'd use a spread to express that" signals you think like a desk.
Basis and the physical system
19. What is basis, and why would one point trade far below Henry Hub?
Basis is the local price minus Henry Hub. A point trades at a big discount when there's more gas than pipeline capacity to move it out — a takeaway constraint. Gas gets stranded locally and the price drops, sometimes even below zero.
20. A pipeline posts a force majeure on a key segment. What do you check?
Which points are upstream and downstream of the constraint, how much capacity is lost, and for how long. Upstream points usually weaken (gas is trapped); downstream points can strengthen (supply is cut off). Then size it against normal flows. Pipelines post these notices on their electronic bulletin boards (EBBs), and desks watch them closely.
21. Why might Northeast prices spike on a cold day when Henry Hub barely moves?
Pipeline capacity into the region is limited. On peak days, demand exceeds what the pipes can deliver, so the local price has to rise until demand drops — even if there's plenty of gas elsewhere. Henry Hub reflects the national balance; Northeast points reflect a local constraint.
Positioning, risk, and tail events
22. Managed money is very short. Does that change your view?
It doesn't change the fundamentals, but it changes the risk. A crowded short means a bullish surprise can force short-covering and an outsized rally. Mention you'd check the weekly CFTC Commitments of Traders data and treat positioning as a risk to your view, not as the view. (How to read the COT report in under 5 minutes.)
23. Next-day gas at a hub trades many times its normal level during a storm. How is that possible?
Day-ahead prices clear physical supply and demand for one day at one location, with no time to bring more gas in. When demand exceeds what can be delivered, the price rises until someone stops consuming. Futures reflect a whole month and more options to respond, so they move much less. This is deliverability, not a simple weather-model miss.
24. You're short winter calls going into a cold forecast. What's your risk?
Unlimited upside price risk plus rising implied volatility: the options get more expensive even before the price moves. One trader put the tail risk plainly: "When you're selling $5, you're selling the chance it goes to $15 for a few days, not $50." Show you know that short-volatility positions in gas can lose far more than they earn in a normal winter.
25. What would make you wrong about your view right now?
Have one. Pick a current view (say, the balance looks loose into winter), then name the specific thing that would break it: a sustained cold pattern, a production outage, faster LNG ramp-up, or a crowded positioning squeeze. This is the question that separates candidates who memorized answers from those who can think like a trader.
How to practice this (tonight)
Reading the answers isn't the skill. Saying them is. Print the Gas Desk Interview Practice Sheet (free with an Arc Research account; see the end of this guide): the five-step chain as a fill-in template for four questions, a seven-day "which step did I skip?" tracker, and a real-numbers page for this week's storage report.
- Pick five questions from different sections above.
- Answer each one out loud in under 90 seconds, using the five-step chain: hub/term → balance line → size and duration → storage vs 5-year average → what's priced and what breaks it.
- Then check against the model answers. Note which step you skipped — most people skip step 1 (which hub, which term) and step 5 (what could make them wrong).
- Tomorrow, take this week's EIA storage report and answer question 12 using real numbers.
Do this for a week and the chain becomes automatic — which is exactly what an interviewer is listening for.
Next: build the balance yourself
Interviewers can tell the difference between someone who has read about a gas balance and someone who has built one. The next guide in this series walks you through building your first US gas balance in a spreadsheet from free EIA data: production, LNG exports, power burn, res/comm, and weekly storage against the 5-year average.
Practice it, then build it
Create a free Arc Research account and get the tools that go with this guide:
- Printable practice sheet: the five-step chain as a fill-in template
- Flashcards for all 25 questions
- The gas balance spreadsheet guide, sent the day it's published
Create your free Arc Research account
Sources and further reading: EIA Weekly Natural Gas Storage Report · NOAA CPC 8–14 day outlook · CFTC Commitments of Traders