Energy Product Derivatives - Australia

Australia

The nominal value in the Energy Product Derivatives market is projected to reach €25.15bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.03% resulting in a projected total amount of €30.64bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to €0.05 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (€24,700.00bn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 561.20k by 2029.

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Analyst Opinion

The Energy Product Derivatives market in Australia is experiencing a notable shift in recent years.

Customer preferences: Customers in Australia are increasingly showing a preference for energy product derivatives due to their ability to hedge against price volatility and manage risk more effectively. This trend is in line with global market behavior, where investors are turning to derivatives as a way to diversify their portfolios and protect themselves from market fluctuations.

Trends in the market: One of the key trends in the Australian Energy Product Derivatives market is the growing interest in renewable energy derivatives. As the country continues its transition towards a more sustainable energy mix, there is a rising demand for derivatives linked to renewable energy sources such as wind and solar. This trend reflects a broader global movement towards green energy and aligns with Australia's commitment to reducing carbon emissions.

Local special circumstances: Australia's unique energy landscape, characterized by a heavy reliance on coal and natural gas, is also influencing the Energy Product Derivatives market in the country. The volatility in traditional energy sources is driving market participants to explore derivative products as a way to manage exposure to price fluctuations. Additionally, the regulatory environment in Australia plays a significant role in shaping the derivatives market, with market participants closely monitoring policy changes and government initiatives that could impact energy prices.

Underlying macroeconomic factors: The overall economic conditions in Australia, including factors such as GDP growth, inflation rates, and interest rates, are key drivers of the Energy Product Derivatives market. Economic stability and growth prospects can influence investor confidence and appetite for derivatives trading. Moreover, geopolitical events and global energy trends also have an impact on the Australian market, as participants assess the potential risks and opportunities arising from external factors.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.