The Future Is Now for LNG as Derivatives Trading Takes Off - Bloomberg

The Future Is Now for LNG as Derivatives Trading Takes Off - Bloomberg:

With natural gas demand growing faster than for any other fossil fuel, LNG futures may be finally taking off.

Derivatives represented about 2 percent of global LNG production at the beginning of 2017 as an array of contracts around the world struggled to gain traction. But by the end of last year, volumes had grown to almost 23 percent, led by a burgeoning Intercontinental Exchange Inc. contract based on S&P Global Platts’ Japan-Korea Marker spot price assessments.

While volumes are a long way off established global energy benchmarks such as Brent crude -- where trade dwarfs worldwide oil production many times over -- the accelerating growth in LNG derivatives illustrates how the market is maturing. An explosion in supply, from the U.S. to Australia, is bringing more market participants and a shift away from traditional pricing.