Trading volumes jump in July as buyers look for certainty

Gas trading on emsTradepoint jumped sharply last month to record levels as buyers moved to lock in future supply.

The market provider emsTradepoint, which is a subsidiary of Transpower, reported that 1.49 PJ was traded in July, an increase of 43% on the previous monthly record in August 2017. This was also a 542% increase on July 2018 volumes when significant supply shortages restricted trading.

Most transactions (1.16 PJ) were made up of forward trades out to the end of 2019, which means the market now has a relatively strong forward curve. The monthly VWAP of the forward curve is between $10.23/GJ and $10.28/GJ with delivered volumes standing between 9.2 TJ and 10.2 TJ per day.

Last year, outages at Pohokura created significant uncertainty in the market. Gas prices more than tripled, with the monthly index reaching a peak of $21.08/GJ in October 2018.

"July’s trading indicates confidence has returned to the market after the uncertainty created by last year’s unplanned outages at Pohokura." emsTradepoint General Manager Quintin Tahau said.

"Sellers have gas, and buyers are currently prepared to pay at higher prices for the certainty."

"Whether these trading levels are sustainable remains to be seen. An upcoming HVDC outage could influence price and supply." Mr Tahau said.

For further information, please contact:
Patrick O'Meara, Senior Corporate Communications Advisor on 027 517 029.

emsTradepoint May 14, 2020, 12:04 p.m.