The FINANCIAL — Intercontinental Exchange, one of leading operators of global exchanges and clearing houses and provider of data and listings services, announced record trading in the TTF Natural Gas and JKM LNG futures contracts.
A total of 866 TWh, equating to 1,183,348 lots of TTF futures, traded during November 2018, an increase of 16% compared to the previous record of October 2018, where 749 TWh traded (1,029,021 lots).
November marks the third month in a row in which TTF futures achieved monthly volume records. Open interest in TTF futures hit a record 857,528 lots on November 29, 2018, a 14% increase on the previous record of 754,669 lots set on October 26, 2018. ICE reports open interest net in line with standard industry practice.
The JKM LNG futures contract achieved record volume of 20,916 lots in November, an increase of 14% compared to the previous record of 18,367 lots set in May 2018. A new record for open interest in JKM was reached on December 4, 2018 with 25,035 lots.
As the LNG market liberalises, a global natural gas marketplace is emerging in which the relationship between Europe and Asia is becoming integral to price formation for natural gas. In recent months, Intercontinental Exchange has highlighted the importance of Europe’s balancing role in LNG markets as the JKM/TTF spread has contracted while, at the same time, spot shipping rates have increased.
These changing natural gas dynamics are increasing the prevalence of TTF and JKM LNG (Platts) contracts as global natural gas benchmarks and are driving their increased use as hedging tools.