Intercontinental Exchange Inc. (ICE) is logging more record trading activity on its European natural gas futures contracts amid increasing volatility in the global market.
An unprecedented 5.5 million Dutch Title Transfer Facility (TTF) futures and options were traded in September, 37% higher than the previous monthly record set in January, ICE said.
The exchange also saw record quarterly volumes. During 3Q2021, ICE reported 13.2 million TTF contracts traded. The previous record of 10.4 million contracts was set in the first three months of this year.
“Natural gas has become a global market and the record trading activity in TTF during this past month, where we have witnessed extreme volatility in prices, reflects how TTF is at the forefront of global natural gas price formation,” said ICE’s Gordon Bennett, managing director of Utility Markets.
Record open interest for TTF futures and options also has been set, with 3.38 million contracts on Sept. 23. That included record open interest of more than two million in TTF futures, ICE said.
The following day, ICE TTF options hit a record high open interest for 2021 of 1.4 million contracts. Open interest in TTF currently goes through December 2028.
TTF prices have hit unprecedented highs recently amid low storage inventories going into winter. Europe has also had to compete for LNG volumes with Asia, where buyers continue to stockpile as colder months near.
ICE has reported record levels of TTF and Japan-Korea Marker (JKM) trading activity over the past several months as the global LNG market has heated up.
Last month, record trading volume was reported for the JKM contract. In August, it reported record levels of open interest for the Henry Hub contract. And in June, ICE extended its forward curve for TTF by more than 18 months following requests from customers.
“The transition to new energy sources is driven by supply and demand, advances in technology and public policy,” Bennett said. “The energy transition underway involves the long-term shift in the fuel mix and creates a broad range of uncertain outcomes. This could serve to increase volatility across energy sources and so the price signal of markets to allow companies to hedge for the future has never been more important.”
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