Name: Opportunities and Risks in the Energy and Commodities Markets in 2026
Uploaded: 2026-02-12T21:47:00Z
Duration: 15 min 14 s
Description: Derek Sammann, Global Head of Commodities Markets, at CME Group breaks down how global trade flows are being reshaped by natural gas supply and demand, AI and resource nationalism from both a producer and consumer perspective.

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Derek Sammann, Global Head of Commodities Markets, at CME Group breaks down how global trade flows are being reshaped by natural gas supply and demand, AI and resource nationalism from both a producer and consumer perspective.

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Opportunities and Risks in the Energy and Commodities Markets in 2026

Thank you. And Derek, welcome.

Thank you, Christine. Happy to be here.

We're happy to have you here. I wanna start by putting our conversation in the context of what you do and what you can see from where you sit. Investors know CME Group as a derivatives marketplace. But within that, can you share the scope of your commodities coverage, customer base, and client segments?

Yeah, working in a group like CME Group is just a wonderful opportunity. Not only are we the world's largest exchange for things like Treasury bond futures, short-term interest rate futures, and equity futures, but we're also the world's largest commodities exchange. We've got benchmark liquidity and the primary global products in energy markets like WTI crude oil, natural gas, and Henry Hub; or whether it's in the precious metals market like gold and silver; or what we're seeing in the agricultural markets and corn, wheat, beans, livestock, and dairy. These are markets that customers use because we trade globally 23 and a half hours a day. We've got a broad ecosystem of participants that use our products because that credit-enabled inside our central counterparty mechanism mitigates counterparty risk. You've got the highly regulated market, meaning customer protections and investor safeguards, and you've got liquidity that trades. Since risk travels around the world, liquidity travels around the world so customers can enter, exit positions, and hedge themselves at all points in the day. So, it's an interesting time. Our commodities market has been on a record pace for these last three years as the world is rapidly changing around us.

Let's talk about the markets. The energy outlook for 2026 is often described as a divergence between oversupplied commodity markets and a stressed, overburdened power infrastructure. And then you add to that mix, of course, geopolitical uncertainties and trade tensions from the previous year. But broadly speaking, what is the elevated market activity in this sector telling you?

Yeah, and I've been in this industry 35 years. I spent the first half of my career trading for banks in Europe, and I've seen elevated levels of volatility in different times, and we're seeing a very different kind of a market and environment right now. You mentioned a couple of the drivers right now, whether it's trade wars between countries, tariffs, elevated levels of geopolitical concerns, or unrest in the Middle East; you've got Iran tensions, now you've got inflation fears, uneven global growth transitions, and a lot of activity in global markets. And for investors, they're trying to understand and parse what the market is telling them and how they're participating in markets. So, we're seeing a pretty significant shift of investment flows. Hedge funds and asset management flows into physical commodities, whether it's kind of shifting into the real economy of gold or of physical commodities, that is sort of an offset or counterbalance to typically the equities and fixed income exposures that a lot of investments will put into portfolios. If you actually step back and look at the environment more broadly, this is very much what we would call a risk-on environment. This is very different from the feel from 2008-2009 when you saw great uncertainty shift into the market, huge spikes in volatility, and then a reduction in what we call open interest or futures and options positions that are held and carried day by day. We're actually seeing a very healthy response to risk in the market, and we would say that by the fact that we see record volumes and activity; we're seeing record amounts of non-U.S. activity. So, meaning our global trading day is active from the Tokyo open to the San Francisco close. We're seeing healthy participation across all of our client segments, whether it's commercial end users and energy markets, agricultural markets, or metals markets, but also on the financial side: hedge funds, asset managers, and pension funds. We see bank volumes growing. So, we see that in conjunction with open interest at stable levels, meaning people are maintaining their risk exposure and trading more day by day. And we're also seeing broad levels of activity in futures and options. So, we see this as a very much risk-on environment despite all the drivers we've already talked about. There's an amount of willingness to trade and extend risk in markets like this, and that's what CME Group does every day. It provides risk management exposure capability for customers to manage through the very uncertain markets that customers are facing right now.

Derek, there are some changes that are cyclical in nature, but a few that you've already mentioned are long-term fundamental shifts, and I wanna focus on that: the structural changes that are driving the energy and commodities market. The first is, of course, the U.S. as the largest exporter of natural gas, a development that only really dates back to 2022 with export capacity that you project will double in the next 10 years. So, how are you seeing that reshaping global trade flows, and how are global traders and asset managers reacting in the way that they're hedging and gaining exposure?

Yeah, that's a great question. And I would say that there have been some structural changes that have been taking place for a number of years now, and I would say even going back to 2015 when the U.S. lifted the U.S. export ban on crude oil, where the U.S. shifted from being a net importer to now what is a net exporter of not just crude oil, but natural gas as well. I would say the events that have then accelerated that shift to the U.S. becoming the largest producer and exporter of natural gas and crude oil was really the impact of Russia's incursions into Ukraine that fundamentally shifted. What you saw was Europe being supplied by Russia for natural gas and crude oil. Once that incursion happened, you saw Europe fundamentally shift away from and seek alternative supplies for crude oil and natural gas. Before that time, the U.S. was actually probably falling behind Qatar and Australia for U.S. natural gas exports. And right now the U.S. has surpassed, to the point you just made, both of those countries and is the largest exporter of natural gas. If you follow some of the market estimates out there, there are projects in the U.S. that will likely almost double liquefaction capacity in the U.S. over the next five to seven years, meaning the U.S. will be able to export almost twice as much natural gas as it does today to supply Europe and Asia. So, some of these structural shifts are just a reforming of global supply chains. And we haven't even spoken about the demand side yet, which I'm sure we'll talk to over the course of our conversation.

I'm sure we will. But for now, let's pivot slightly to another structural change. I wanna get some of these pieces out, which is this shift from an efficiency-first model for energy markets to one that prioritizes security of supply and geopolitical leverage. Can you talk about that resource nationalism and how that is showing up in regions in the Middle East, EU, and here in the U.S. and North America, both from a producer and consumer perspective as you were alluding to earlier?

Yeah, I think that's a great point, and I think that's a little bit missed in kind of the activity of markets right now. But the reality is that energy policy is becoming national security policy. And I think that a lot of countries are rethinking their global supply chains, and if you're a net importer of energy, I think countries are realizing that they have had, and maybe still face, reliance on single sources of supply. So, it's coming back to a reforming and a redistribution of global supply chains. If you are on the net supplier side, if you are in excess of the natural resources we're talking about, specifically crude or natural gas, then the question becomes: Well, how do you manage your excess supply? Do you want to be an exporter and provide that price of reference for global markets? We very much see that taking place in the U.S. in natural gas where we've seen the U.S. now become the dominant and the single largest exporter of natural gas. Meaning, not only is that setting the price for domestic consumption of natural gas, but it is setting the price for LNG, which is leaving the U.S. and being exported to Europe and Asia. So, the U.S. Henry Hub natural gas price is becoming the de facto global market for LNG and natural gas being imported into places like Europe and Asia. So, it's a fascinating time. It's also having some really interesting impacts in energy-transition-linked markets, whether it's battery metals, whether it's the biofuels nexus to agricultural markets and natural gas itself. So, it's a really interesting time of change, and it's a great time to be in the part of industry that partners with our clients to help them manage through and risk-manage price uncertainty in this time of market uncertainty.

So, let's talk agriculture, where another structural change is underway. Your agricultural business has grown 50% in two and a half years. How much of that growth is from the convergence of energy and agricultural market dynamics?

Yeah, it's a great question. I think that we've been in the agricultural business since the 1850s. People forget that our roots go back 160, 170 years. We've been a public company since 2002. So, when you think about CME Group, the historical roots are agricultural markets; and agricultural markets as a fuel source in the world has always been a benchmark, but it's really been limited to food security. And I think to the point you just made, there's the nexus of energy and agricultural markets that we've never seen to the degree that we're seeing today. Whether you think about the biofuels market, the obvious one is the connection between corn, which is the feedstock for ethanol, a renewable source of energy. Same thing on soybean oil; it is the feedstock for renewable biodiesel. So, we're seeing some really interesting dynamics whereby agriculture used to be looked at just as a food source; it's actually now portions of a fuel source as well. So, we're seeing markets adjust to that. So, for example, we used to have energy traders who would really only trade our energy products, and agricultural customers would really only trade our agricultural products. But now we're seeing that convergence of these market structures and client segments. So, we're seeing our biggest energy customers now become our biggest agricultural products customers, and vice versa. So, it's certainly a contributing factor. Now that said, the core of what we do is we set prices for global physical flows of grains and oilseeds, of livestock, and of dairy, and the market and the world depends on that, but we're seeing different kinds of customers gain exposure to our agricultural markets because of its connection to energy.

And, speaking of trading volumes, CME Group is seeing record trading volumes. You're seeing your options business growing faster than the futures. How do you explain markets' need for access to even more discrete specific event risks?

Yeah, that's another great question. I think it's an observation that we've been tracking very carefully over these last probably 10 years here at CME Group because this record amount of energy options traders, agricultural options volumes, and metals options volume is not just specific to this year. This has been a trend for 10 years where we've seen a consistent and significant growth of options. And I think first and foremost, I think it speaks to the increasing sophistication of end users and of investors that are looking for more flexible tools to add to their risk management toolkit. We're not seeing customers do fewer futures and more options. We're seeing customers add options into their portfolio. It's another arrow in their quiver of their risk management tools to allow them to manage through what have been some pretty dynamic markets over the last couple of years. So, first and foremost, I'd place that on sophistication, increasing levels of client participation in our market. Secondly, I would say, you know, options are really purpose-built for managing uncertain outcomes. So, we see a lot of customers that might have a core hedge exposure in place, but might use our short-dated options to hedge around discrete event risk, whether it's a non-farm payroll announcement date, or whether it's a Fed meeting date, or whether it's an OPEC meeting, or whether it's a WASDE report in the agricultural markets, customers want and need tools to be able to not just manage a core hedge and an exposure, but also be able to manage around discrete event risk. And that's one of the reasons why our options had such significant and sustained growth as we've added short-dated expirations and smaller versions to really be able to use granular tools to surgically manage exposures in our customer portfolios.

Derek, finally, we saved the best for last. Let's talk about the elephant in the room that will over the long term fundamentally change how energy is consumed, managed, and priced, and that is AI. We talked about overburdened power infrastructure earlier. How is AI impacting the long-term demand for natural gas as the fuel of choice to power this massive infrastructure build?

Yeah, we oftentimes spend a lot of our conversation talking about the supply side of physical markets and where it's coming from and how customers manage when they're in excess of physical commodities. Think farmers and ranchers. Think about the big energy producers, think about the big miners of this world, but the demand side is equally important, as you know. And so, I think the story of AI is one of not just an increased power demand, but what is that source of that power going to be? Layer that on top of the energy transition story. And at one point, there was a very strong pendulum shift away from fossil-based fuels. So, whether it's crude oil or natural gas, and I think there was maybe an over-quick reaction to trying to replace and move away from fossil fuels and instantaneously replace that with renewables like solar and wind. I think what we've seen over the last three or four years is that not only do customers need to know they have access in ample supply to the underlying resource they need to drive their power needs, but it has to be consistently available. And I think that's one of the things that the market has learned. So, we've seen that pendulum swing back a little bit now. So, rather than have our markets telling us, "Hey, we want to move entirely away from fossil fuels and natural gas into renewables," I think the recognition now is sustainability and sustainability of supply is of utmost importance to them. So, we're seeing natural gas continue to be not just a transition fuel, but natural gas is really considered to be the fuel of the future. It's clean-burning, it's an ample supply, and I think that the infrastructure is catching up for the demand, hence the almost doubling of liquefaction capability in the U.S. to be able to continue to increase our not just production, but export capability of natural gas as well. So, on the demand side, I think you're gonna see that continue to see a bigger and bigger driver. And at the same time, you're also seeing customers sort of create their own verticals to manage their source of power. We've seen some examples of customers buy their own nuclear facilities and build and insource access to their own power. It comes back to making sure there's a reliable source of reliable energy to drive the AI needs and the overall needs of markets going forward. So, it's a fascinating time, and I think this market will look very different in 10 years than it does today, as it looks very different now than it was 10 years ago.

Thank you, Derek. I agree with you. Definitely fascinating times that we're living in. Thank you so much, Derek. We covered so much, a lot of ground and so much more to talk about, but we will have to leave it here. Thank you for joining us today.

Thanks, Christine. I appreciate it.