Poland Enables Auction-based Trading in Gas Forward Instruments

Poland stepped up its attempts to promote an increasingly liquid exchange market, enabling auction-based trading in gas forward instruments on the Commodity Forward Instruments Market from Thursday.

“The order structure on the forward and spot market shows that the supply exceeds the demand. However, gas buyers will emerge if only the most important element of the market mechanism, i.e. the price will be satisfactory to both parties to the transaction. The auction system should be an additional instrument stimulating the activity on this market,” said Ireneusz ‎Łazor, President of the Polish Power Exchange.

The additional options for trading the fuel on the POLPX will be available for monthly, quarterly and yearly forward contracts. 

”This could be a particularly interesting option for large players,” said ‎Łazor in a note released on Wednesday.

Poland started the gas exchange at the end of 2012 to comply with European Union requirements to liberalize its gas market, which is dominated by state-controlled monopoly PGNiG. The auction-based trading in gas forward instruments will start from October 24.