Natural gas trade activity numbers leap after ICE agreement

Since a collaboration with Intercontinental Exchange took effect six months ago, S&P Global Platts has seen a substantial increase in natural gas trade information on a day-to-day basis, resulting in a more enhanced view of the markets.

In the agreement, which went online October 31 for spot trades and in December for bidweek transactions, Platts incorporates ICE trades when compiling indices, and also publishes all natural gas indices for Platts and ICE trading locations.

The agreement with ICE came at a time when Platts and other price reporting agencies had seen a progressive decline in daily and monthly volumes reported.

Spot daily volumes averaged 21,430 MMBtu/d in 2011. By 2016, they were  15,687 MMBtu, down 27% in five years.

A similar drop was seen in volumes during bidweek action. In 2011, monthly volumes averaged 14,962 MMBtu; by 2016, they were down to 10,995 MBtu, a 26.5% drop.

That trend was quickly reversed when the Platts-ICE agreement took hold.

In November 2016, market participants reporting trade data to publishers turned in deals that averaged 16,000 MMBtu in volumes. In November 2017, the average daily volumes seen jumped to 28,205 MMBtu -- a 76% increase.

The increase in volumes reported has continued unabated, with every month showing higher volumes than the corresponding month in 2017. In May, volumes were up 76% over the May 2017 total, at 25,560 MMBtu.

Platts will continue to monitor the impact the ICE agreement has had on our daily and monthly indices, issuing regular updates on how the deal has bolstered our assessments.