Energy Product Derivatives - United Kingdom

United Kingdom

The nominal value in the Energy Product Derivatives market is projected to reach €0.70tn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.39% resulting in a projected total amount of €0.91tn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to €0.01 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 10,600.00k by 2029.

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Analyst Opinion

Amidst the dynamic landscape of financial markets, the Energy Product Derivatives market in the United Kingdom has been experiencing notable trends and developments.

Customer preferences: Market participants in the United Kingdom are increasingly drawn to Energy Product Derivatives due to their potential for portfolio diversification and risk management. Investors are attracted to the opportunities these derivatives offer for speculation on price movements without the need to trade physical commodities.

Trends in the market: One significant trend in the Energy Product Derivatives market in the United Kingdom is the growing interest in renewable energy derivatives. As the country continues to transition towards a more sustainable energy mix, there is a rising demand for derivatives linked to renewable energy sources such as wind and solar power. This trend is in line with global efforts to combat climate change and shift towards cleaner energy alternatives.

Local special circumstances: The United Kingdom's energy market is influenced by various factors such as government policies, regulatory frameworks, and energy infrastructure developments. The country's commitment to reducing carbon emissions and promoting renewable energy sources shapes the demand for specific types of energy derivatives. Additionally, geopolitical events and fluctuations in global energy markets can have a significant impact on the UK's energy derivative market.

Underlying macroeconomic factors: Macroeconomic factors such as interest rates, inflation, and economic growth play a crucial role in shaping the Energy Product Derivatives market in the United Kingdom. Changes in these factors can impact investor sentiment, market volatility, and the overall demand for energy derivatives. Moreover, currency fluctuations and trade dynamics can also influence the pricing and trading of energy derivatives in the UK market.

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.