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Do we have aligned and reliable gas exchange prices in Europe?

European energy trades give a reliable price reference to exchanged gas. Exchanges are seen as performing a crucial part in the improvement of an exchanged ware advertise and give the important functions. Get a glimpse of it here

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Do we have aligned and reliable gas exchange prices in Europe?

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  1. Do we have aligned and reliable gas exchange prices in Europe? The article featured on European Gas Hub’s website. Get a glimpse of it here.

  2. Section 1. Introduction and methodology This comment paper follows on from three previous publications by the Author and assesses whether the main European energy exchanges provide a reliable price reference for traded gas.

  3. Section 1. Introduction and methodology After discussing the relevance of this research question (Section 2), it is addressed by adopting different but complimentary approaches, which are applied to the set of data presented in Section 3

  4. Section 2. Relevance of the research question As clearly stated by Heather (2015): “Exchanges perform a vital role in the development of a traded commodity market and provide five important functions: price discovery, price transparency, supply/pricing flexibility, physical balancing and financial risk management”.

  5. Section 2. Relevance of the research question Based on this, if gas exchange trading activity exists and offers reliable price signals, we can conclude that these vital functions are provided at satisfactory level and therefore foster the development of a mature traded commodity market.

  6. Section 3. Data The European exchanges that offered gas controls in 2015 are: ICE, ICE-Endex, EEX, Powernext, CEGH, GME, POLPX, CME and MIBGAS.

  7. Section 3. Data • EEX and Powernext also signed a cross-market agreement and accordingly they market each other’s contracts on a shared platform called PEGAS that became fully operational on 1st January 2015.

  8. Section 4. The importance of exchange trading As explained in Section 2, this paper extends the analysis of previous works by this Author, based on the OTC brokered trading market, to gas trading on the main European energy exchanges.

  9. Section 5. Comparison b/w exchange & OTC day ahead prices Exchange-OTC daily rice differences are also low for the Czech and Austrian hub: the median daily difference is below 0.05 €/MW.

  10. Section 6. Exchange Price Correlation Exchange day ahead prices moved in a rather parallel fashion in 2015, with very narrow price spreads between TTF, NCG, GSL, ZTP, VOB and PEGN.

  11. The Detailed Article Read this paper in detail here http://www.europeangashub.com/ or download the PDF from here http://www.europeangashub.com/custom/domain_1/extra_files/attach_611.pdf

  12. Thanks for your valuable time!

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