On February 2, APGA sent letters to the Commodity Futures Trading Commission (CFTC) and the CME Group, asking both to take a closer look at the troubling trading activity that has recently taken place in the natural gas futures market.
On January 27, the NYMEX market, which is housed by the CME Group, experienced its largest one-day gain since the 1990s. The natural gas February contract settled at $6.265/MMBtu, substantially higher than the January close of $4.024/MMBtu. Moreover, there was a 46% rally in that futures contract during the last 30 minutes of trading. This market activity directly results in higher natural gas prices for consumers, as it impacts the indices prices at which many APGA members purchase their gas. When price spikes happen, not-for-profit public natural gas systems have no choice but to purchase the high-priced natural gas to keep the heat on in their communities.
APGA is committed to ensuring natural gas remains an affordable energy choice for Americans, and believes these inquiries will help us better understand what has been happening in the market. APGA will continue to engage with CFTC and others, as appropriate, to help protect consumers from future price spikes.
A copy of the APGA’s letter to CFTC is available
here, the letter to CME Group is available
here, and the associated press statement is available
here.
For questions on this article, please contact Renée Lani of APGA staff by phone at 202-464-0836 or by email at
rlani@apga.org.