World News
Glencore Xstrata Enters LNG Trading
Commodities giant Glencore Xstrata (Glencore) has entered the liquefied natural gas (LNG) trading market, hiring a four-person team of traders from Morgan Stanley, Reuters reports.
LNG is one of the fastest growing commodity markets, with increasing volumes of the fuel shipping from Qatar, Nigeria, Indonesia, and other countries.
While LNG markets generally involve long-term supply deals by major oil companies or producer countries, trading houses including Glencore and the Vitol Group are seeking to take advantage of U.S. LNG exports to increase their involvement in the markets.
"What has stifled trading is that nobody could get anything much to trade," said the former head of LNG at a major European energy company.
"The introduction of U.S. volumes linked to (benchmark U.S. gas price) Henry Hub changes everything."
Trading houses could take advantage of spot trading opportunities in Asia, where the fuel can be sold for as much as $20 per million British thermal units (mmBtu), compared with prices as low as $4 per mmBtu in the U.S., where shale gas has pushed prices down.
One LNG shipping company executive said Glencore could lead the way into the market for other trading houses.
"Glencore is the type of company that others will follow ...so hopefully it is a sign of people coming back into the market," the executive said.
The new Glencore traders are Maggie Jia, Rajiv Panicker, Lou Montilla, and Luis Lesmes.
Anticipated growth in markets has prompted Nigerian and Chinese companies to invest in LNG tankers in recent months.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 502.00 | 4.50 | 617.00 | 5.50 |
| Rotterdam | 457.50 | 2.50 | 623.50 | 6.50 |
| Houston | 469.00 | 3.50 | 623.00 | 2.00 |
| Fujairah | 494.50 | 6.50 | 715.50 | 5.50 |
| Global 20 Ports Average | 526.00 | 3.00 | 712.50 | 11.50 |
| Global 4 Ports Average | 481.00 | 4.00 | 645.00 | 4.50 |
| Global Average Bunker Price | 569.00 | 2.00 | 750.00 | 5.50 |
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