KCBT Files For CFTC Approval To Alter Western Natural Gas Contract

The Kansas City Board of Trade on Friday filed with the Commodity Futures Trading Commission to convert the western natural gas futures contract from a "flat price" contract to a "basis" futures contract. Anticipating CFTC approval, all contract months from February 2000 forward have been delisted from trading flat price natural gas futures contracts. This allows the exchange to begin trading basis futures contracts effective with the February 2000 contract month upon CFTC approval. The anticipated start date of the basis futures contract is Monday, Nov. 29, 1999. If the entire open interest in the January 2000 contract is liquidated during the 45-day CFTC fast track review period, the Kansas City Board of Trade intends to delist that contract month from flat price futures trading and begin trading basis futures on November 29, 1999 effective with the January 2000 contract month. If this occurs, KCBT membership will be notified accordingly. "This change in our western natural gas contract is in response to the demands of our western natural gas customers," said Michael Braude, KCBT president. "Our members questioned their customers to see what hedging tool they were lacking and the answer was a basis contract. As always, the KCBT is responding to our customers' desires." Additionally, western natural gas "index" futures and western natural gas options contracts have been delisted from trading and rendered dormant. These contracts are not applicable to the new basis futures contract. KCBT western natural gas futures and options were launched in August 1995 as a risk management tool for the western U.S. market. The contract has a delivery point of PG&E Gas Transmission's Permian/Waha Hub in west Texas.