ICE Report Highlights Natural Gas Market Liquidity

ICE reported on the significant growth in liquidity within its US natural gas markets. It attributes this surge to customers tackling price risk management challenges in response to increasing market volatility and locational price risks.

In March, open interest in North American natural gas futures reached a new high of 17.45 million contracts. Futures and options experienced a 17% year-over-year (y/y) increase in open interest at 27.84 million, with a 15% rise in volumes and an average daily volume of 1 million contracts year-to-date. US financial natural gas futures and options recorded a peak open interest of 10.4 million, with an 11% y/y growth in open interest.

Hubs that have witnessed remarkable volume growth this year include Houston Ship Channel Basis futures (up 85%), Waha Basis futures (up 25%), NWP Rockies Basis futures (up 157%), CIG Rockies Basis futures (up 243%), and REX Zone 3 Basis futures (up 128%). Concurrently, ICE NGX, which provides clearing for physically delivered natural gas at 81 hubs across 30 US states, saw a 24% y/y increase in cleared physical US natural gas volumes.

J.C. Knaele, VP North America power, natural gas/liquids at ICE commented on the state of the market, saying, “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.”