Dutch TTF trade surge
June 6 (LNG) - Intercontinental Exchange, the leading global provider of energy trading platforms for futures and options, said average daily volumes (ADV) soared in May for natural gas products. Average daily volumes for the Dutch Title Transfer Facility (TTF) valuation for LNG increased by 79 percent year-on-year and Open Interest (OI) was up 34 percent compared with last year.
Open Interest is the term used for the number of contracts that remain open each day and reflects how customers are adding to their positions for a period of time. Total natural gas ADV and OI were both up 10 percent compared with May 2022. “This included record futures OI of 19.7 million lots on May 25,” Atlanta-based ICE said. “North American natural gas OI was up 9 percent, including record futures OI of 17.7M lots on May 25,” ICE added.
Energy trading platform provider ICE posts solid earnings ahead of new European LNG futures launch
Intercontinental Exchange, a leading global provider of energy trading platforms for futures and options and which is in the process of launching new LNG futures for Europe, reported strong third-quarter earnings.
UK as a main European LNG and pipeline gas user has also now launched emissions auction
The UK, the second-largest LNG importer in Europe and with an average of around 45 percent of gas-fired usage for power, has hosted its first emissions auction organised by the Intercontinental Exchange, the leading operator of global energy derivative exchanges and clearing houses.
Intercontinental Exchange reports 46 percent surge in the average daily volumes of JKM spot LNG
The Intercontinental Exchange has released its latest statistics showing a 46 percent year-on-year surge in the average daily volumes of trading in the Japan-Korea Marker (JKM) spot LNG price for North Asia, while the main European LNG product, the Dutch Title Transfer Facility (TTF), showed a 24 percent jump in daily volumes.
US prices mirror torpid LNG market while higher pipeline exports to Mexico offset by Canadian imports
Seven LNG shipments left US plants in the past week compared with eight in the previous week while pipeline natural gas exports to Mexico increased 6.4 percent and feed-gas for plants on the Gulf Coast rose by 18 percent, boosting prices in the region.
LNG traders and others return to Henry Hub hedging amid Dutch TTF and Asian JKM contracts surge
The Intercontinental Exchange, the US-based operator of trading in commodity and financial markets, said ICE’s North American gas complex and natural gas futures hit an open-interest record of 18.5 million contracts during this current second quarter of 2020 as trading in European and Asian LNG derivatives also jumped.
“In ICE’s North American gas complex, dynamic US shale production has stimulated activity,” said the Atlanta, Georgia-based company.
“With futures open interest at record levels, up 30 percent year-over-year, market share has increased as commercial traders return to Henry Hub-related hedging in response to increased volatility in the North American market,” ICE explained.
These derivatives are purchased and sold by parties such as traders, oil and gas companies and utilities as hedges against rises and falls in physical resource prices.
At the same time as new highs are recorded in North America, ICE said the globalization of natural gas is propelling the growth of the ICE Dutch Title Transfer Facility (TTF) indicators for LNG shipped to Europe and the Japan-Korea Marker (Platts) for Asian spot LNG cargo futures.
ICE owns 12 regulated exchanges and platforms and its best-known subsidiary is the New York Stock Exchange.
The platform operator stated that the Continental European TTF and the Asian JKM are now “benchmarks relied on by commercial participants” around the world.
“As uncertainty has been rising in both supply and demand dynamics across the world, these traders are increasingly utilizing the breadth and depth of liquidity in ICE’s natural gas and oil benchmarks to help manage risk and optimize their natural gas portfolios,” ICE stated.
As a result, ICE said that open interest in TTF futures and options has increased by more than 70 percent year-over-year, while JKM futures and options open interest has more than doubled year-on-year.
In May 2020, the JKM hit record open interest of more than 100,000 contracts.
“The momentum behind the ICE TTF contract is driven by Europe’s unique role as the global balancing market for LNG which is cementing its utility as a risk management tool for customers to hedge their natural gas price risk,” ICE explained.
“This is leading TTF to become increasingly internationalized, while at the same time, the record growth in the use of JKM futures reflects its increasing prominence as Asia’s natural gas benchmark,” added the markets operator.
“We are witnessing TTF evolve into the global benchmark for natural gas, similar to the critical role Brent plays in pricing global oil markets,” said Ben Jackson, President of ICE.
“The momentum behind ICE’s gas benchmarks is attracting more and more participants who are using these benchmarks to manage their exposure to risk at this volatile time,” added Jackson.
ICE’s global natural gas complex spans trading hubs from the US and Canada to Europe and Asia, underpinned by an offering of more than 600 financially and physically-delivered contracts.
“Open interest in ICE’s US Basis contracts, which are used to manage exposure to natural gas at different delivery points throughout North America, set a series of records during April and May, and hit a new high of more than 10.1 million contracts on May 1, 2020,” said the company.
“ICE offers 60 different basis locations to trade, enabling customers to mitigate their risk at locations across North America,” it added.
