CME restarts gas and metals futures trading after glitch

Trading in US natural gas futures was halted for more than half an hour on Wednesday, the second major disruption in a month in one of the most heavily traded commodity markets. Metals contracts were also affected.

CME Group Inc. said gas futures and options on its Globex electronic platform restarted trading after an interruption due to technical issues.

The halt, which CME said lasted about 50 minutes for gas futures and 35 minutes for options, came on the same day that the natural gas futures contract for March delivery expired, a key date for traders looking to roll over their positions. Prices rose before settling 1.9% higher at $2.969 per million British thermal units.

Trading in metals, including gold and copper, on Globex was also halted before resuming at around 1:45 p.m. Central Time.

The latest glitch “erases confidence over liquidity and price discovery at a time when the market has been contending with a market dysfunctioning given the wild price swings,” Nicky Shiels, head of metals strategy at MKS PAMP SA.

Gas traders were left fuming in late January after the New York Mercantile Exchange — the CME-owned futures exchange — imposed an extraordinary two-minute trading halt during the market close. That move skewed the settlement price and confounded traders already dealing with unusually high volatility due to cold weather.

CME said last month that its natural gas complex reached a new single-day record of more than 2.5 million contracts traded on Jan. 20, up 15% from the previous daily record seen in November 2018. Natural gas has grown increasingly volatile as rising US liquefied natural gas exports and the artificial intelligence boom supercharge demand.

CME has also seen a record volume of metals contracts change hands this year as prices surged to new peaks and sent volatility skyrocketing, especially in gold and silver.

Nymex is one of the two main exchanges for the highly traded US gas futures contract, which reflects the price for monthly delivery of the fuel to the so-called Henry Hub benchmark in Erath, Louisiana.

US gas futures are heavily traded not only because of the country’s position as the biggest producer and exporter of the fuel, but also because gas is responsible for about 40% of US electricity generation.

Globex is CME’s electronic trading platform that houses its futures and options trading and allows traders to directly enter trades and view their book of orders and access real-time price data.

Gas futures trading on the competing Intercontinental Exchange was unaffected.

(By Julian Hast and Yvonne Yue Li)