Paid Program for CMEGroup: U.S.-based Henry Hub pricing represents 86% of global gas futures trading, and it’s showing no signs of slowing.
Natural gas derivatives totaled around 510,000 terawatt hours in 2018, up almost 5 percent on the previous year.in the United States and its associated regional basis markets, the Dutch TTF benchmark, the UK NBP benchmark and Platts JKM, which represents the import price for LNG in north Asia.
Within natural gas derivatives, Henry Hub remains dominant, both in terms of trading volumes and influence. Henry Hub accounts for 86 percent of total natural gas derivatives traded globally, with the U.S. basis markets, whose price is linked to Henry Hub, accounting for an additional 6 percent. The international markets are still a fraction of the size of the U.S. markets, totaling around 8 percent of global trade. This split between U.S. and international trade has remained stable in recent years, with growth in the TTF coming largely at the expense of the NBP — the only natural gas benchmark that is in decline. The Dutch TTF is currently the largest international benchmark, with over 5 percent of the total global market.
The fastest rate of growth is in the Platts JKM benchmark, from 37 TWh in 2016 to 536 TWh in 2018. The potential of this benchmark is obvious, given the growth in demand for LNG from north Asia, but it still a minnow relative to the more established benchmarks, accounting for just 0.1 percent of global natural gas derivatives trade.U.S. dominance of global natural gas derivatives looks set to persist in the long term due to the huge volumes of gas being produced from onshore shale deposits.
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