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Markets & Forecasts

US exchange launches first physical delivery LNG contract

Most new futures contracts fail, but the CME Group’s proposed US LNG export futures contract may be an exception Most new futures contracts fail, but the CME Group’s proposed US LNG export futures contract may be an exception.
By Peter Stewart 25 September 2019 World / LNG 0 34586
CME Group’s new LNG futures contract has been welcomed by Asian customers. (RWE)

As the United States ramps up its LNG exports, the risk has grown that supply tightness in the early 2020s may be followed by a glut after 2025. CME Group’s new LNG contract – which, pending regulatory review, will be available for trading on 14 October – could provide a vehicle for buyers to protect themselves against future market volatility.

If it clears the remaining hurdles, it will be the first LNG futures contract to feature physical delivery. Buyers will initially take cargoes from Cheniere Energy’s...