The Commodity Futures Trading Commission has voted to bring seven over-the-counter natural gas contracts offered by the Intercontinental Exchange under its regulatory oversight, after concluding that they played a “significant price discovery function”.
In a vote on Tuesday April 27, the five CFTC commissioners all voted in favour of placing the contracts under oversight, following recommendations from the regulator’s staff.
The seven contracts now controlled by the CFTC are the NWP Rockies Financial Basis, HSC Financial Basis, PG&E Citygate Financial Basis, Waha Financial Basis, Chicago Financial Basis, Socal Financial Basis and the Alberta Financial Basis.
The term “basis” refers to the difference between the New York Mercantile Exchange’s settlement price for natural gas at the Henry Hub in Louisiana and the value of natural gas at another important production, storage or consumption centre in the US or Canada.
Richard Shilts, director...