(Bloomberg) -- European gas traders are bidding into longer-term contracts with a view that fuel demand will remain elevated well into the 2030s, even as the region transitions to renewables.
The Intercontinental Exchange Inc. registered its first trade of Dutch gas futures for 2033 last Friday, according to an ICE spokesperson. That means trading of Europe’s gas benchmark has now extended all the way to that year.
While one of this year’s dominant trades has been to hedge against swings caused by short-term price volatility, going long signals a view among some traders that gas demand is set to persist for the foreseeable future.
The move also comes ahead of a substantial expansion of supply. QatarEnergy has signed 27-year deals with Shell Plc and TotalEnergies SE for deliveries of liquefied natural gas to Europe, cementing the continent’s commitment to fossil fuels beyond 2050.
ICE’s Henry Hub futures — the North American benchmark — also extend until 2033. The trade illustrates the maturity of the European gas hub, as Henry Hub is the most liquid market to trade the fuel globally.
--With assistance from Anna Shiryaevskaya.
©2024 Bloomberg L.P.
