Trading

Commodity Trade Flouts Broader Exchange Trade Decline

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Trade in derivatives has been one of the most controversial activities in finance since the opacity around those markets was held by observers to blame for the scale and depth of the financial crisis of 2008. One of the key solutions recommended by regulators was to move trade in contracts onto exchanges, where they could be monitored more closely.

That effort showed early signs of success as the more-liquid contracts moved online but efforts to make exchange trading the default have faltered and – for many types of derivatives – actually reversed. Keep reading →

 /  Published March 13, 2013 at 1:28 PM

Iraqi Budget Snubs Kurds – What’s Next for Oil Business?

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The long-running dispute between Iraq’s central government in Baghdad and Kurdistan Regional Government leaders in Erbil entered a new phase when the Iraqi Parliament last week passed a 2013 budget that allocated a fraction of the money requested by the KRG. A bulk of this funding is used to pay oil companies operating in the semi-autonomous region.

“In a blatant stiff-arm to the Kurds, the budget allocates just $646 million to cost recovery for Kurdistan Regional Government oil contractors — a figure that covers only around two months’ worth of the crude that Erbil was slated to provide this year,” Michael Knights said in a Policy Alert from the Washington Institute for Near East Policy, a think tank. The KRG reportedly requested $3.5 billion. Keep Reading →

 /  Published March 11, 2013 at 6:30 PM

China Surpasses US as World’s Largest Oil Importer

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China recently surpassed the US as the world’s largest net oil importer, as the US produces more and consumes less while Chinese demand steadily increases. US net oil imports have fallen from a peak of 13 million barrels per day in October 2006 to under 6 mmb/d in December 2012, according to a Citi research note issued February 28, titled “Milestones Toward US Energy Independence – Alert: US net Oil Imports Plummet to Second Place Behind China.”

“Meanwhile, since China flipped from a net exporter to a net importer of oil in 1993, its net oil imports have risen steadily to 6.3 mmb/d in January 2013, just under last May’s peak,” the Citi analysts said in the note. Keep reading →

 /  Published March 11, 2013 at 8:30 AM

How U.S. Shale Gas Boom Could Derail China

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Despite objections, the U.S. is heading down the road to export natural gas, and that could ultimately help shake up world energy markets.

The boom in U.S. natural gas, thanks to new drilling technologies has resulted in a record amount of recoverable gas at cheap prices. Selling some of it abroad would bolster U.S. exports, help trade imbalances and relations, and provide fuel to parts of the world where it is now scarce and expensive. Keep reading →

 /  Published March 7, 2013 at 2:30 PM

Green Investing Update

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“No more Solyndras!” may make the headlines but money is continuing to be deployed in the green energy sector each year. It is a global phenomenon. According to an analytical service, Bloomberg New Energy Finance, the first trillion dollars was invested at the end of 2011 and the next trillion will be invested in five years. This is occurring because renewable energy technologies and clean energy are beginning to scale globally, due to cost reductions and wider deployments. Added to this reality is the phenomena of impact investing as younger people with money are more engaged in clean energy solutions. This factor is significant, with 52% of the world’s population being under 30 and generational wealth being transferred to the young.

Another factor in this rising green financial milieu is the nascent impact of crowd funding. Solar Mosaic, a photovoltaic solar play in New York and California, was able to raise $1.1 million in one day for several projects in multifamily housing. The projects are expected to generate 4.5% returns for many years. More capital will be flowing into US clean energy as community solar takes off and smaller investors, who are not accredited at $ 1million in net worth, begin deploying their capital in this sector. It is the law of large numbers and it is opening a flood gate
in innovative financing. The SEC has yet to write the rules of the game in this emerging arena catalyzed by the Jobs Act. Keep reading →

 /  Published March 6, 2013 at 12:10 PM

Oil Industry Mulls Next Steps for Venezuela

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Venezuelan President Hugo Chavez’s death is not likely to result in near-term changes to the Venezuelan oil industry or global energy landscape, but it could ultimately result in political change that would reopen the country’s energy industry to foreign investment.

As news of Chavez’s death swept through IHS CERAWeek, the world’s largest conference for energy executives, in Houston on Tuesday afternoon, participants flocked to televisions, looking for news on the political future of a country that has the second largest oil reserves in the world. Keep reading →

 /  Published March 6, 2013 at 9:30 AM

Finding an Edge in the Booming US Energy Market

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In a domestic energy market developing faster than just about anyone can remember, the key for investors is in finding an edge.

That’s not easy in a natural gas market bloated with inventory. But oil is a different story. Those domestic oil companies innovating new schemes to get their product to market or pulling more oil from the ground are at the leading edge of America’s energy renaissance. Keep reading →

 /  Published March 4, 2013 at 2:00 PM

Pro: Why It’s Time to Get Into Nat Gas

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Natural gas has been trading in a serious downtrend starting in November, but Monday’s upside action constituted a clear breakout from that trend.

So what’s behind the strength? Keep reading →

 /  Published February 26, 2013 at 2:30 PM

Power Market Transparency: Money Out of ‘Negawatts’

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Americans are accustomed to being told that they are running behind other countries, that other places are doing a better job of educating their young or building high-speed railroads or ensuring access to healthcare. Energy efficiency would seem to be the last area in which the US, with its famously well-lit and climate-controlled lifestyle, would be leading.

But in fact, demand response markets that allow customers and power providers to reap the benefits of “negawatts” (essentially un-used power they would traditionally demand or need to supply) are highly developed in the US, if admittedly still imperfectly understood and applied. The market for demand response, which is the activity that creates “negawatts,” has grown from essentially nothing a decade ago to a $3 billion market today, Joule Assets CEO Mike Gordon told Breaking Energy on the sidelines of the AGRION Energy & Sustainability Summit in New York City this month. Keep reading →

 /  Published February 26, 2013 at 8:00 AM

States Encourage and Discourage Renewable Energy Trading

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Renewable energy trading markets vary considerably by state and can be heavily influenced by politics, but they are functioning with apparent room for growth.

The various markets fall within the territories controlled by large utilities and independent system operators and are then further subdivided by state. Some states like Illinois fall within the jurisdiction of multiple utilities or ISOs. Keep reading →

 /  Published February 25, 2013 at 12:00 PM
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