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Record depths of liquidity across natural gas markets

Published by , Editorial Assistant
World Pipelines,

Intercontinental Exchange, Inc., a leading global provider of data, technology, and market infrastructure, has announced record levels of liquidity across its US natural gas markets as customers manage price risk.

ICE offers hundreds of physically delivered and cash settled contracts covering regional hubs across North America to allow customers to manage the difference in price of natural gas delivered at each hub. On 28 March 2023, open interest hit a record high of 17.45 million contracts across North American natural gas futures. In futures and options, open interest is up 17% y/y at 27.84 million with volumes up 15% and average daily volume year to date of 1 million contracts.

ICE’s US financial gas markets cover 64 hubs across North America, allowing customers to manage regional supply and demand dynamics. On 28 March 2023, US financial natural gas futures and options hit record open interest of 10.4 million, with open interest up 11% y/y.

Hubs which have seen particularly strong volume activity this year include Houston Ship Channel Basis futures where volume is up 85%, Waha Basis futures volume up 25%, NWP Rockies Basis futures volume up 157%, CIG Rockies Basis futures volume up 243%, and REX Zone 3 Basis futures volume up 128%. Meanwhile, cleared physical US natural gas volumes rose by 24% y/y at ICE NGX, which offers clearing for physical natural gas delivered at 81 hubs covering 30 states across the US.

“We are seeing high levels of trading activity across North American natural gas markets as customers manage volatility and locational price risk, leading to higher demand for hedging which in turn is attracting more participants into the market and further benefiting liquidity,” said J.C. Kneale, Vice President, North America power, natural gas and NGLs at ICE.

In ICE’s Henry Hub LD1 future, ICE offers the most liquid markets to manage longer term exposure to benchmark US natural gas prices, with commercial participants drawn to the deep liquidity offered out to December 2032. Open interest is up 22% y/y at 17.43 million contracts across futures and options, with volume up 11%. Options volume in Henry Hub is particularly strong this year, up 46% y/y, with open interest up 43%.

ICE offers the broadest range of natural gas benchmarks spanning trading hubs across the US, Canada, Europe, and Asia. On 28 March 2023, ICE’s total natural gas complex reached record open interest of 19.19 million in futures, surpassing the record last set in June 2021. ICE’s markets include the US natural gas benchmark Henry Hub, the Canadian natural gas benchmark AECO, ICE’s European natural gas benchmark TTF and TTF 1st line contract, ICE’s UK natural gas benchmark NBP, and ICE JKM LNG (Platts) the benchmark price for natural gas for North-East Asia.

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US pipeline news Natural gas pipeline news Trends and analysis