Energy Product Derivatives - Brazil

Brazil

The nominal value in the Energy Product Derivatives market is projected to reach US$607.10bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 2.39% resulting in a projected total amount of US$683.20bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to US$15.38 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$26,910.00bn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 40.43k by 2029.

Market

Region

Region comparison

Currency

Analyst Opinion

The Energy Product Derivatives market in Brazil has been witnessing a significant increase in trading activities over the past few years.

Customer preferences: Traders and investors in Brazil are increasingly turning to Energy Product Derivatives as a way to diversify their portfolios and hedge against market volatility. These financial instruments offer an attractive opportunity to speculate on price movements without owning the physical assets.

Trends in the market: One noticeable trend in the Brazilian Energy Product Derivatives market is the growing interest in renewable energy derivatives. With the global shift towards sustainable energy sources, market participants are showing a preference for derivatives linked to renewable energy products. This trend aligns with Brazil's efforts to increase its renewable energy capacity and reduce its carbon footprint.

Local special circumstances: Brazil's energy sector is known for its heavy reliance on hydropower, making it vulnerable to fluctuations in water levels and weather patterns. As a result, market participants in Brazil pay close attention to weather forecasts and hydrological data when trading energy derivatives. This unique aspect influences trading strategies and risk management techniques in the market.

Underlying macroeconomic factors: The Brazilian Energy Product Derivatives market is also influenced by broader macroeconomic factors such as interest rates, inflation, and government policies. Economic indicators play a crucial role in shaping investor sentiment and market dynamics. As Brazil continues to navigate through economic challenges and policy reforms, market participants closely monitor these factors for potential opportunities and risks in the energy derivatives 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.