Commodities titan Glencore Xstrata PLC (GLEN.LN) set up a new liquefied natural gas team last week to take advantage of opportunities in the burgeoning physical LNG market, a person familar with the matter said.
Commodities titan Glencore Xstrata PLC (GLEN.LN) set up a new liquefied
natural gas team last week to take advantage of opportunities in the burgeoning
physical LNG market, a person familar with the matter said.
Glencore Xstrata hired four former Morgan Stanley (MS) traders who opened
Glencore's new LNG trading desk last week, the person said. The team is based
in
London
and
Singapore
, he
added.
Glencore Xstrata has expanded into LNG trading to take advantage of
opportunities for arbitrage in the LNG physical market geographically and by
blending products in order to achieve higher premiums for its products, the
head of Glencore Xstrata's oil operations, Alex Beard, said last month.
"LNG, I think fits more naturally, more properly within a physical trading
house than it does within a bank and that's why we feel that the LNG market has
now got to a scale and the size that is interesting for us to trade physically,
" said Mr. Beard. "That's why we have an LNG team starting in
September, looking for those physical LNG trading opportunities," he
added.
Mr. Beard said LNG is of particular interest to Glencore Xstrata because it
trades more like oil than natural gas. In other words, LNG can be put on a ship
and traded globally, thereby increasing the potential for arbitrage
opportunities. Meanwhile natural gas tansported by pipe has limited arbitrage
opportunities because it can only reach specific destinations and in fixed
quality grades. Piped natural gas is better suited for financial derivatives trading,
a service traditionally provided by banks, Mr. Beard said.
On the oil side, Mr. Beard said that the pull back of large banks such as
JPMorgan from the commodity markets, particularly in oil, is creating a
opportunity for Glencore Xstrata and other physical traders to fill the gap.
After spending billions of dollars in a decades-long expansion into all corners
of the raw-materials business, Goldman Sachs Group Inc, JPMorgan Chase & Co
and Morgan Stanley are trying to sell their physical commodities operations due
in part to stricter banking rules regarding capital requirements and increased
regulatory scrutiny over bank ownership of physical assets such as oil
pipelines and metal warehouses.
"JPMorgan certainly was bigger in the last three or four years than
before. So... there may be more opportunities for trading companies," he
said, indicating that trading companies could potentially provide financing in
return for off-take agreements, a service that banks have been in the habit of
providing.
Διαβάστε ακόμα
Παρ, 26 Ιουλίου 2024 - 16:04
Παρ, 26 Ιουλίου 2024 - 16:02
Τετ, 24 Ιουλίου 2024 - 15:10
Τετ, 24 Ιουλίου 2024 - 15:06
Τρι, 23 Ιουλίου 2024 - 16:51