Global Markets

Trade friction may complicate LNG hedging tools

Exchanges in the US and the UK are developing indexes to help traders balance risks when buying LNG, but the state of the global market is making this difficult Exchanges in the US and the UK are developing indexes to help traders balance risks when buying LNG, but the state of the global market is making this difficult.
By Peter Stewart 22 August 2018 0 32225
Trade friction between the United States and China could complicate the development of LNG hedging tools. (Axel Ahoi/unsplash.com)

Growing market volatility is making the need for LNG hedging tools more pressing, but trade friction between the United States and China could complicate their development. 

In July, exchanges in the UK and the US proposed new hedging instruments for LNG that could allow buyers and sellers to manage their price risks more precisely. The Chicago Mercantile Exchange (CME), the parent company of the New York Mercantile Exchange (NYMEX), signed an agreement with Cheniere to develop an LNG futures contract with physical delivery at the Sabine...