Energy Product Derivatives - Kuwait

Kuwait

The nominal value in the Energy Product Derivatives market is projected to reach US$27.01bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 6.18% resulting in a projected total amount of US$36.46bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to US$0.12 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 242.00k by 2029.

Market

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Region comparison

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Analyst Opinion

The Energy Product Derivatives market in Kuwait is experiencing a significant growth trajectory, driven by various factors shaping the market landscape.

Customer preferences: In Kuwait, customers are increasingly turning to Energy Product Derivatives as a way to diversify their investment portfolios and hedge against price fluctuations in the energy sector. The market offers them the opportunity to speculate on price movements without owning the physical commodities, providing a more accessible and flexible investment option.

Trends in the market: One notable trend in the Kuwaiti Energy Product Derivatives market is the growing interest from institutional investors, including pension funds and insurance companies. These entities are attracted to the market's potential for generating high returns and mitigating risks, aligning with global trends where institutional participation in derivative markets is on the rise.

Local special circumstances: Kuwait's strategic location in the energy-rich Middle East region plays a crucial role in shaping its Energy Product Derivatives market. The country's significant oil reserves and production capacity create a conducive environment for derivative trading, with market participants leveraging the region's energy dynamics to make informed investment decisions.

Underlying macroeconomic factors: Macroeconomic factors such as geopolitical tensions, global oil demand-supply dynamics, and regulatory developments influence the Energy Product Derivatives market in Kuwait. The country's reliance on oil exports and its sensitivity to international energy prices make it particularly responsive to external factors, driving trading activities and market volatility. Additionally, Kuwait's efforts to diversify its economy and attract foreign investments contribute to the evolving landscape of Energy Product Derivatives in the country.

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.