First trade reported as Northwest Europe LNG futures contract launches on CME

The first trade of the LNG North West Europe Marker (Platts) Futures Contract occurred Oct. 24 on CME, a January trade of five lots at $34.40/MMBtu, or flat to JKM, the benchmark price reflecting spot deliveries of LNG to Northeast Asia, according to market sources.

It was not immediately clear who the counterparties to the transaction were. The contract size is 10,000 MMBtu and monthly contracts will be listed for the current year and the next five calendar years, CME has said.

The contract is cash settled against the Platts DES Northwest Europe physical assessments and launched Oct. 24.

Over the last 15 months, European LNG and natural gas markets have diverged to wide levels as a glut of cargoes flooded the Atlantic, first because of demand, then because of Russia's war in Ukraine. The decoupling also reflects intra-European and inter-basin economics, as well as shipping rates, being such that arbitrage opportunities are said to be limited. Regasification slot capacity for prompt cargoes in Europe also is currently limited.