The European Energy Exchange (EEX) plans to launch cash-settled Gas Futures on the European Gas Spot Index (EGSI) as well as associated cash-settled Spark Spreads within the first quarter of 2021.
Financial Gas Futures will be listed on the Dutch, Austrian and German market areas and will cover the whole curve from short term (Day Futures, Weekend and Week contracts) to longer term maturities (Month, Quarter, Season and Calendar Year). The launch of these cash-settled contracts will enable easier access to the European gas markets for financial firms who do not require physical delivery while at the same time allowing all parties to trade at the EGSI index price for hedging purposes.
"EEX operates the most liquid gas spot markets in Europe. Our EGSI index is calculated on all trades executed during the day and follows a clear methodology, making it the most robust and transparent pricing reference in the market. I am confident that introducing Financial Gas Futures settled against EGSI in addition to our Physical Gas Futures, will provide the market with the instruments they need" says Dr Tobias Paulun, Chief Strategy Officer of EEX.
By listing cash-settled Futures, EEX will also enable its members to trade the price difference between the new Gas Futures and existing Power Futures (Spark Spreads).
Commenting on the launch, Steffen Koehler, Chief Operating Officer at EEX declares: "One year after the integration of the gas activities within EEX, the launch of cash-settled Spark Spreads will enable a bridge between Gas and Power derivatives. This launch will simplify hedging of gas fired power plants and make gas and power members benefit from the liquidity in both derivatives markets, thereby accelerating the market’s integration".
The upcoming cash-settled Gas Futures will join a portfolio of already more than 1,000 Natural Gas products offered by EEX in ten countries and twelve hubs across Europe.