Market Dynamics Report

NOVEMBER 13 2015

October 2015

October 2015: Volumes up, spotlight on Euro Gas contribution, and REMIT implementation

October was a month of rugby, warm temperatures and increasing volumes. As the New Zealand All Blacks were making history, winning the Rugby World Cup for the second time in a row, volumes in the Euro Commodity markets grew, also for the second month in a row. Total monthly contracts traded for Oct-15 were up 9% vs. Sep-15 to 6.435 million.

Euro Gas volumes continue to contribute strongly to total market volumes, with 39% share of total monthly contracts YTD 2015. This is 9% greater than the second largest commodity grouping, UK Gas, and 4% up vs. YTD 2014. While total Euro Gas volumes are seeing an overall upward trend, the actual movements within Gas is mixed. Table 1. shows the relative size of each of the commodities included in the commodity class groupings, and their MoM and YTD volume movements.

While NBP shows growth MoM, YTD volumes are down. Meanwhile TTF is showing continued strength, as it maintains volumes at 97% of NBP this month and has shown positive growth MoM and YTD. TTF dwarfs the remaining commodities included in the Euro Gas grouping, at ten times the size of NCG, the second largest commodity in Euro Gas. TTF's majority contribution drives the movement of the Euro Gas grouping and demonstrates the growing importance of the TTF hub. Cleared market share across the commodities is also mixed, with the most liquid contracts showing the highest cleared market share.

Despite cleared market share in the double digits for TTF, the brokers regained share in Euro Gas this month, with broker bilateral market share up 3% MoM. This was driven by TTF, with the broker bilateral volumes increasing 18% and share up 3%. PEGAS had a record month in TTF futures trading, with exchange executions up 109% MoM and their cleared market share growing 7% to 13% vs. Sep-15. CME also doubled cleared volumes in TTF. ICE's fortunes were not so rosy, with exchange executions down 7%, and cleared market share down 8% MoM.

The Euro Power grouping also showed an increase in broker market share, up 1% to 55% of the market. This increase was driven by French Power's record month, up 16% to 135 TWh to regain the title as the second largest Euro Power market. Nordic Power slipped back to third with a 16% drop MoM to 123 TWh. The French markets' larger broker bilateral share nudged Euro Power broker bilateral share upwards.

The REMIT regulation came into force on October 7, requiring market participants to report standard physical European Power and Gas orders and transactions to ACER. We have not seen any real impact of this on the market as volumes have continued the seasonal trend with growth this month. We'll keep an eye on developments as the regulation settles into operation.

Downloadable Content

Monthly Commodities Report October 2015 (1MB)

Monthly Dynamics Report November 2015 (1MB)

Downloadable Content

Monthly Commodities Report October 2015

Monthly Dynamics Report November 2015