LNG

Intercontinental Exchange, the leading global provider of trading platforms for the whole energy complex from crude oil to LNG cargoes and European and Asian natural gas futures and options, has refined its contract for key US Gulf Coast oil futures.

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.