LNG

Intercontinental Exchange Inc., the leading global provider of energy trading platforms, said that global futures and options markets reached record open interest of almost 94 million contracts during March as market players in sectors such as oil, natural gas and LNG launched hedging operations as prices declined.

Intercontinental Exchange Inc., the leading global provider of energy trading platforms, said that global futures and options markets reached record open interest of 90.2 million contracts during February as market players in sectors such as oil, natural gas and LNG launched hedging operations as prices declined.

Intercontinental Exchange Inc. (ICE) reported another trading surge on natural gas and LNG futures and options with very high liquidity and including record open interest in the US benchmark Henry Hub.

Intercontinental Exchange Inc., the owner of the world renowned New York Stock Exchange and platforms for trading global oil and gas futures such as the US Henry Hub, North Sea Brent crude and the Dutch Title Transfer Facility for LNG and natural gas, has signed an accord for dual listing with the Johannesburg Stock Exchange (JSE) in South Africa.

Intercontinental Exchange, the leading global provider of trading platforms and clearing, and US pricing agency Platts have launched simultaneous consultations with the market on the evolution of the Brent complex, which includes Dated Brent, Cash Brent and ICE Brent Crude Oil futures.

ICE, which also operates other exchanges, including the New York Stock Exchange, also offers its platforms to allow traders to manage risk across multiple asset classes, including LNG.

In the ICE overall energy complex, it has posted record activity during 2021 in two key LNG trading derivatives, the European benchmark Dutch Title Transfer Facility (TTF) and the Japan-Korea Marker for North Asian spot cargoes.

The paper on the Brent market, co-authored by Platts and ICE which oversee, respectively, the Dated Brent physical benchmark price assessment and the ICE Brent Crude Oil futures contract, provides an overview of options for adding additional deliverable crude oil to the Brent complex and outlines a number of key issues and questions as it seeks market feedback.

Ongoing discussions conducted separately by ICE and Platts have demonstrated that industry opinion has focused specifically on two possible streams of crude to become part of Dated Brent.

The first is Johan Sverdrup as a deliverable option under the Forward Brent contract, which would remain on a Free on Board (FOB) basis.

The second is West Texas Intermediate (WTI) Midland oil, which would be a deliverable grade on a FOB US Gulf Coast basis.

All interested parties are encouraged to provide feedback and to put forward any further relevant items through the respective consultation channels.

The deadline for comments is September 30, 2021.

“Key to Brent’s multi-decade success as the global crude oil benchmark, has been its ability to evolve, and we look forward to ongoing discussions with customers as we navigate this next phase of its evolution with Platts,” said Jeff Barbuto, Global Head of Oil Markets at ICE.

“Our goal for this consultation is to facilitate a discussion with market participants covering all of the key issues which need to be addressed so that we can strengthen the Brent complex for decades to come,” added Barbuto.

In addition to Brent, natural gas has become a global market and the record levels of open interest and strong trading activity in TTF and JKM LNG futures reflect how these contracts have been developed by ICE and are at the forefront of global natural gas price formation.

Some long-term LNG supply contracts for nations like Japan are also linked to the oil price.

TTF and JKM futures and options form part of ICE’s global natural gas complex alongside the UK National Balancing Point, Henry Hub, the West India Marker (WIM) LNG (Platts) and the Spark LNG Freight Futures contracts. 

Intercontinental Exchange Inc., the US-based operator of regulated trading platforms for commodity and financial markets, reported multiple records in oil and natural gas futures trading as well as in its corporate earnings, giving it the “strongest quarter in the company’s history.”

ICE reported record revenues as daily volumes trading in energy futures and options surged during March in contracts such as the US benchmark West Texas Intermediate crude oil, North Sea Brent and natural gas.

The Atlanta, Georgia-based company recorded multiple records across the crude oil, natural gas and fuel product futures markets.

These derivatives are purchased and sold by parties such traders, oil and gas companies and utilities as hedges against rises and falls in physical resource prices.

Platform operator ICE reported that there were record futures and options trading across all types of financial derivatives.

Futures and options trading in the first quarter was up 45 percent year-on-year, driven by record volumes across all asset classes with average daily volume (ADV) records broken and energy trading up 54 percent, agri and metals up 31 percent and interest-rates instruments 28 percent higher.

The high volumes continued into April with energy open interest (OI) contracts still 23 percent higher versus 2019, including Brent crude up 27 percent, natural gas up 28 percent and other crude and refined products up 33 percent.

Despite the turmoil, ICE said that the New York Stock Exchange listed 15 initial public offerings during the first quarter, helping its customers raise over $7 billion in IPO proceeds.

For the quarter ended March 31, ICE said its consolidated net income was $650 million on $1.6 billion of revenues, less transaction-based expenses.

The revenues were 23 percent higher than in the first quarter of 2019.

“Amidst these highly uncertain times, we are grateful for both our customers’ business and their trust,” said Jeffrey C. Sprecher, ICE Chairman and Chief Executive.

“The dedication of our employees and our focus on leading technology is what provides the foundation for our global markets to operate smoothly in times of stress,” added the CEO.

“This combination enabled us to generate the strongest quarter in our company’s history, reporting record revenues and double-digit earnings per share growth,” explained Sprecher.

“As we look to the balance of the year, our focus remains on the safety of our employees, while also continuing to ensure that our markets, clearinghouses and related data services perform to the highest possible standards,” stated Specher.

Scott A. Hill, ICE Chief Financial Officer, said that in the first quarter the company recorded mutiple records, which enabled the firm to return over $850 to stockholders through its dividend and stock buyback program.

ICE’s data and listings revenues in the quarter were $676M and trading and clearing net revenues were $883M.

“This performance also enabled us to continue to invest in our business, ensuring we can continue to provide our customers with critical risk management tools while also creating value for our stockholders,” stated Hill.

Intercontinental Exchange Inc., the US-based operator of regulated trading platforms for commodity and financial markets, has reported that daily volumes trading in energy futures and options rose by more than 80 percent to record levels in March.

The Atlanta, Georgia-based company with divisions for trading, clearing and data has provided March and first-quarter 2020 trading
volumes, related revenue statistics and also provided an updated operating expense outlook.

ICE recorded multiple records across the crude oil, natural gas and fuel product futures markets.

These derivatives are purchased and sold by parties such traders, oil and gas companies and utilities as hedges against rises and falls in phyical resource prices.

Platform operator ICE said that its record futures and options overall average daily volumes (ADV) for energy and other commodities amounted to 9.4 million lots for March 2020, up 56 percent year-on-year.

ICE said record open interest (OI) volumes came to 84.4M lots, up 7 percent from March 2019.

For the energy sector record March daily volumes in futures and options amounted to 4.4M lots, up 82 percent on the previous year.

The record energy OI lots reached 45.9M on March 25, 2020, up 24 percent on March 2019.

LNG products traded on ICE platforms include the growing US Gulf Coast LNG last day future available since October 2019.

The future trades out to May 2022 when it was last quoated at $3.655 per million British thermal units.

However, the front-month May 2020 GC LNG future illustrates the price plunge in the over-supplied LNG market with a current price of $1.350 per MMBtu.

Among the various record level futures and options products traded in March, ICE said the ADV for oil were up 85 percent and the OI of 15.3M lots was reached on March 25, 2020.

The Brent North Sea crude ADV were 87 percent higher year-on-year and record OI reached 6.1M lots on March 25, up 27 percent from 2019.

West Texas Intermediate crude ADV rose 82 percent year-on-year and the futures OI level of 698,000 lots was reached on March 26 with total March OI up 7 percent reached versus March 2019.

The North American natural gas ADV were 88 percent higher compared with last year and futures OI of 15.7M lots was reached on March 26. The Total March OI for natural gas was up 26 percent.

The European natural gas ADV were up 50 percent from 2019 and the record OI of 3.5M lots was on March 26, 49 percent higher than the year before.

There was also a record emissions ADV with a rise for March of 96 percent and OI volumes were up 15 percent.

ICE said operating expenses are expected to be in the range of $663 million to $673M for the first quarter $2.60 billion to $2.65Bln for the full year respectively.

“Revised adjusted expense guidance for the first quarter of includes approximately $4 million related to the February 2020 acquisition of Bridge2 Solutions,” said ICE in reference to its purchase of the digital provider of loyalty solutions for merchants and consumers.

“In this volatile period, we are grateful to our customers who rely on our dependable, stable and resilient systems amid record activity across every asset class,” said Ben Jackson, President of ICE.

“We’re working around the clock to help ensure the orderly functioning of our markets, providing our customers with the critical risk management tools that these markets provide,” he added.

CME Group, the other leading derivatives market, has also reported record daily volumes for oil and natural gas futures and options after the market falls.

The biggest CME traded volumes have been on West Texas Intermediate Light Sweet Crude Oil futures, Henry Hub Natural Gas futures, New York Harbor Ultra Low Sulfur Diesel (ULSD), RBOB Gasoline Futures and Brent Last Day Financial Futures.

Eighth on the CME traded list was the Natural Gas European Option.

The CME’s LNG futures are all relatively new and did not make the list as they were only launched within the past six months.

CME, which is the former Chicago Mercantile Exchange, introduced its LNG freight futures on December 23, 2019.

The trading and settlement platform launched the Platts LNG future for LNG in 2019 linked to physically delivered volumes from Cheniere’s Sabine Pass plant in Louisiana.