Back to the Future(s): The Best Commodities Benchmarks Are Still Physically-Settled
Since 2002 and the advancement of financially-settled energy products via the NYMEX ClearPort platform — incumbent futures exchange operators have mostly neglected physically-settled markets. This created problems. Why? We dig into the issues below and present tangible arguments why today’s LNG and other global commodity markets require physically-settled benchmarks for better price discovery, more reliable hedging, and improved risk management.