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A Global Natural Gas Market Is Starting to Emerge

  • Growing short-term spot market is spurring financial trading
  • Need to manage risk has boosted JKM volumes, open interest
Liquefied natural gas dispenses through pipes on-board a LNG tanker.

Liquefied natural gas dispenses through pipes on-board a LNG tanker.

Photographer: Jason Alden/Bloomberg
Updated on

Financial derivatives linked to liquefied natural gas are mushrooming as a market crash and a boom in physical trading creates an appetite to manage risk and provides opportunity to speculate on prices.

The growth is helping speed up the development of a truly global trade in the fuel, linking together what has historically been geographically isolated markets into something with the depth and complexity of oil, the world’s most heavily traded energy commodity.