(a) First, a client asks you to plot the forward curves (as of 19 July 2022) for both the NYMEX Henry Hub Natural Gas futures and the NYMEX WTI light sweet crude oil futures contracts. You should plot these on the same set of axis with timetodelivery on the xaxis rather than the delivery date itself. So you can compare, you should also scale the futures prices by the current spot price, so that both forward curves start at 100 at timetodelivery equals zero. For simplicity you should assume that the timetodelivery is rounded off to the nearest month; e.g. 1 month for Aug 22 contracts, 2 months for Sep 22 contracts.

(b) Provide an explanation of the patterns of each forward curve and discuss any differences/similarities between them. News announcements and online articles on economic market conditions that may have had an impact should be used to support your discussion.

for traders and investors. Prices for NYMEX Henry Hub Natural Gas futures and NYMEX WTI light sweet crude oil futures contracts (both traded on CME) are presented in Table 1 below. In particular, futures contracts expiring up to July 2024 are provided. We also know that on 19 July 2022 the spot price of natural gas was USD7.531 per MMBtu (one million British thermal units) and the spot price of light crude oil was USD103.45 per barrel. Table 1: NYMEX Henry Hub Natural Gas futures prices and NYMEX WTI light sweet crude oil futures prices observed on 19 July 2022 for traders and investors. Prices for NYMEX Henry Hub Natural Gas futures and NYMEX WTI light sweet crude oil futures contracts (both traded on CME) are presented in Table 1 below. In particular, futures contracts expiring up to July 2024 are provided. We also know that on 19 July 2022 the spot price of natural gas was USD7.531 per MMBtu (one million British thermal units) and the spot price of light crude oil was USD103.45 per barrel. Table 1: NYMEX Henry Hub Natural Gas futures prices and NYMEX WTI light sweet crude oil futures prices observed on 19 July 2022