Gas futures as a factor of the Ukrainian capital market development

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The purpose of the paper is to analyze current trends in the gas futures market and the prerequisites for their spreading in Ukraine. The analysis is based on scientific research results, search query time series provided by Google Trends, and statistical databases of derivative markets. The paper reveals the trends in the reshaping of the commodity derivatives market after 2008 in favor of commodity derivatives and the fast-growing volume of gas futures in the EU after 2017. The dual reason for these trends comes from the growing energy challenges and the tightening of financial derivatives regulation. Both reasons depend on real economic activity. This determines the presence of economic prerequisites for the spread of gas futures in the world.
The paper identifies the main institutional prerequisites for the spread of gas futures in Ukraine: an active gas exchange with growing volume of the spot trading and a situational factor of the energy market reforming. Initiatives of the gas market liberalization in Ukraine correspond to the energy market reform in EU. The identified trends, prerequisites, advantages and obstacles for the spread of gas futures allow to generalize proposals for state regulation, such as organizing the Ukrainian energy market as a hub to attract participants from other countries, as well as supporting the spread of gas futures on the capital market through the implementation of clearing mechanisms.

Acknowledgment
The paper was funded as part of the “Determination of institutional conditions for the development of the exchange segment of the gas market” research project (No. 0122U002205), conducted at the State Institution “Institute for Economics and Forecasting of the NAS of Ukraine”.

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    • Figure 1. Shares of commodity futures in the derivatives market in 2007–2020, %
    • Figure 2. Number of commodity futures contracts in 2007–2020, mln
    • Figure 3. Google Trends analysis of “gas futures” search queries in the world in 2004–2022 with polynomial trend line
    • Figure 4. Number of natural gas futures contracts in 2017–2022 in the EU market, mln
    • Figure 5. Development of gas trading on the Ukrainian Energy Exchange in 2017–2020
    • Table 1. Market share of the largest natural gas retailer of the EU in 2013–2020, %
    • Conceptualization
      Yevhen Bublyk
    • Methodology
      Yevhen Bublyk
    • Project administration
      Yevhen Bublyk
    • Software
      Yevhen Bublyk
    • Supervision
      Yevhen Bublyk
    • Investigation
      Oleksandra Kurbet
    • Validation
      Oleksandra Kurbet
    • Visualization
      Oleksandra Kurbet
    • Writing – review & editing
      Oleksandra Kurbet
    • Data curation
      Roman Yukhymets
    • Formal Analysis
      Roman Yukhymets
    • Resources
      Roman Yukhymets
    • Writing – original draft
      Roman Yukhymets