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Broker of the year: OTC Global Holdings

Broker of the year: OTC Global Holdings

https://www.risk.net/commodities/6605341/broker-of-the-year-otc-global-holdings OTC Global Holdings (OTCGH) had a stand-out year in 2018, growing its oil business by 40%, hitting the one-millionth trade on its EOXLive electronic platform and adding forward curves for...

OTC GLOBAL HOLDINGS NAMED “BROKER OF THE YEAR”

BY ENERGY RISK MAGAZINE FOR FOURTH TIME IN NINE YEARS HOUSTON –(May 15, 2019) – OTC Global Holdings (OTCGH), the world’s largest independent commodity interdealer broker, has been named 2019 “Broker of the Year” by Energy Risk, an internationally recognized...
Brexit Weighs on Oil and Gas Firms

Brexit Weighs on Oil and Gas Firms

The eyes of the world are on the UK Parliament, where members of the House of Commons on Friday again defeated a plan outlining terms for the UK to withdraw from the European Union (EU). Nearly 52 percent of the UK electorate participating in the June 23, 2016,...

Exchange giants take their rivalry to Texas as shale oil booms

Battle of the contracts reflects Houston’s growing status as an energy trading hotspot Gregory Meyer in New York and David Sheppard in London yesterday The world’s two biggest energy exchanges have taken their fierce rivalry to Houston, Texas in pursuit of business...

OTC GLOBAL HOLDINGS’ EOXLIVE TO EXHIBIT AT FIA EXPO IN CHICAGO

OTC GLOBAL HOLDINGS’ EOXLIVE TO EXHIBIT AT FIA EXPO IN CHICAGO Leading independent interdealer broker in over-the-counter commodities’ market data platform has grown its business by nearly 30 percent in 2018, will showcase expanded offerings Chicago (October 15,...

OTC GLOBAL HOLDINGS’ EOXLIVE BROKERS ONE MILLIONTH TRANSACTION

OTC GLOBAL HOLDINGS’ EOXLIVE BROKERS ONE MILLIONTH TRANSACTION HOUSTON (AUGUST 9, 2018) – EOX Holdings LLC (EOX), a subsidiary of leading independent institutional broker of commodities OTC Global Holdings (OTCGH), announced that on August 6, 2018 its brokers...

Press and Media

Power Blows Past $9,000 Cap in Texas as Heat Triggers Emergency

by Chris Martin and Naureen S Malik, August 13, 2019

Electricity prices briefly surged past a $9,000 a megawatt-hour price cap in Texas as extreme heat sent power demand skyrocketing and forced the state’s grid operator to declare an emergency.

As temperatures in Dallas climbed to 103 degrees Fahrenheit (39 Celsius), the Electric Reliability Council of Texas issued an emergency alert, calling on all power plants to ramp up and asking customers to conserve. At one point on Tuesday afternoon, the region had just 2,121 megawatts left in power reserves, less than 3% of total demand on the system.

The prospect of supply shortages sent wholesale electricity prices surging past $9,000 a megawatt-hour for several minutes, triggering a limit set by Ercot to avoid runaway prices during extreme events. They remained near the cap at around 5 p.m. local time as demand began leveling off and the region’s supply margins widened.

Power contracts traded on the Intercontinental Exchange were similarly headed for record settlements, said David Hoy, an electricity trader at Dynasty Power. “It’s almost guaranteed now,” he said.

The unprecedented rally highlights how fragile Texas power markets — and to a lesser extent, markets across the U.S. — have become as giant, conventional power plants retire, squeezed out by cheap natural gas and renewable energy resources. Texas’s grid operator has been warning for months that plant shutdowns and increasing electricity demand has left it with slim supply margins.

“We are seeing the coal fleet retirement hasn’t been replaced with a lot of large gas plants,” said Campbell Faulkner, chief data analyst for commodities broker OTC Global Holdings. “We are changing the generation mix and that is what this is caused by.”

What BloombergNEF says: “Power demand is growing faster in Texas than anywhere else in the U.S.” –Brian Bartholomew, analyst covering U.S. power markets

Electricity demand hit an all-time high of 74,531 megawatts as people blasted their air conditioners on Monday afternoon and totaled 74,310 megawatts at 4:34 p.m. local time Tuesday, according to Ercot. Temperatures were forecast to peak at 103 degrees in Dallas before cooling off Tuesday evening and falling back below 100 degrees on Wednesday. The National Weather Service has issued a heat advisory until 8 p.m. local time.

“Extreme heat across the Ercot region will continue to result in high loads,” Ercot said in a statement. “We may set another new record today.”

This week’s price spikes also underscore how dependent the region’s power grid has become on wind farms, which now make up about a quarter of the generation capacity in Texas. Lackluster breezes contributed to the higher prices, said Flannan Hehir, a power analyst at energy data provider Genscape.

Wind power generation in the region has plunged for three straight days, grid data compiled by Bloomberg show.

Power generators with plants in Texas rallied on Tuesday. Vistra Energy Corp. gained 2.4%, and NRG Energy Inc. rose 1.9%.

“We would expect Vistra to have enough capacity to meet the high load and profit from the spike in prices,” Citigroup Inc. analysts led by Praful Mehta said in a research note.

Please find the article linked here and full coverage in the email below: Power Blows Past $9,000 Cap in Texas as Heat Triggers Emergency

ERCOT’s extreme prices unlikely to result in new thermal generation: experts

by Mark Watson, August 14, 2019

Houston — The Electric Reliability Council of Texas’ systemwide real-time wholesale power prices on Tuesday spent more than four hours above $1,000/MWh and 90 minutes around $9,000/MWh, but industry observers Wednesday said they generally doubted it was enough to incentivize conventional generation capacity growth.

Evan Caron, co-head of TrailStone Power, an energy asset management company based in Austin, Texas, said this week’s pricing is unlikely to prompt investment in retaining or expanding capacity in ERCOT, because the real-time price jumps “barely moved the forward curve” in Tuesday’s trading.

The July 2020 on-peak package settled around $86.21/MWh on Tuesday, up from $85.03/MWh on Monday and $82.62/MWh on Friday, according to the Platts M2MS forward curve. Wednesday’s price jumped to $95.66/MWh. As context, the July 2019 on-peak package averaged $79.33/MWh in August 2018.

The August 2020 on-peak package settled at $135.95/MWh on Tuesday, up from Monday’s $134.11/MWh and Friday’s $130.34/MWh, but Wednesday’s price jumped to $150.74/MWh.The August 2019 on-peak package averaged $122.33/MWh in August 2018.

“While yesterday’s market outcomes are still being analyzed, it is unlikely that these high prices were sustained for a long enough period to signal on their own that new investment is economically viable in ERCOT,” said Michele Gregg, executive director of Texas Competitive Power Advocates.

‘HEADWINDS OF A RECESSION’

Campbell Faulkner, senior vice president at Houston-based OTC Global Holdings, an interdealer commodities broker, said, “I do not foresee additional generation based off of the past two days, particularly gas baseload plants.

“The ultimate question is: Will companies facing the headwinds of a recession be willing to bet on financing and continued low gas prices?” Faulkner said in an email. “If gas remains low, more gas … capacity will be built, but it’s a difficult act, especially for firms that remember the price volatility from just a few years ago. Five-dollar gas changes a large amount of the economic structure for gas baseload power production, and a lot of firms have been burned building capacity in ERCOT.”

Several industry observers foresee additional price volatility in the summer of 2020, when ERCOT’s latest Capacity, Demand and Reserves Report forecasts a planning reserve margin of 10.5%, up from this summer’s 8.6%, but well below the 13.75% considered the minimum necessary to ensure ERCOT has capacity-related power outages no more than one day in 10 years. The planning reserve margin is the percentage by which generation resources exceed forecast peakload.

“Prices next summer should be very volatile, particularly if the summer is warmer than this year,” Faulkner said. “Most of the June-July stretch was relatively cool, limiting peak demand on the ERCOT [grid]. If we continue to see coal units retired along with the constantly growing demand for power in Texas, seeing [Energy Emergency Alert] events might become much more common.”

Asked whether presidential politics may be delaying final investment decisions for generation in ERCOT, TrailStone’s Caron said, “Possibly, but we will lose the rest of the coal fleet regardless.”

“One day doesn’t make their year, especially as they were all probably 80% or more hedged coming into the month,” Caron said.

OTC Global’s Faulkner said the “extremely low thermal cost of gas vs. thermal coal” is a bigger factor that presidential politics on thermal generation investment.

“Much of the hand waving and bluster from Washington casts a shadow but does not directly act to inform the hard reality of generation mix and grid reliability in Texas,” Faulkner said. “Anyone who claims that there will be a totally renewable electric supply anytime soon is either consigning the ‘rest of us’ to poverty via extremely high energy prices or is totally ignorant of the realities of a stable electricity supply (physics, grid planning, etc.).”

WIND OUTPUT EFFECTS

One factor that appears crucial during Tuesday’s price spike is the lack of wind output during peak times.

While acknowledging that ERCOT declared an Energy Emergency Alert for the first time since 2014, TCPA’s Gregg said, “ERCOT managed the grid exceedingly well.”

“However, the correlation between reduction in wind and the need for reliable thermal generation cannot be ignored,” Gregg said. “The desire to have renewable energy should not overshadow the need to also invest in reliable thermal generation.”

From a high of around 16 GW between midnight and 1 am Tuesday, the wind fleet’s hourly average output dropped to less than 2.8 GW around noon CDT, and stayed below 5.5 GW through 5 pm CDT. ERCOT’s highest systemwide average prices ranged from 3 pm to 5 pm.

“We’re likely to see many more price spikes like this in the future,” said Sean Kelly, CEO of Amperon, a New York-based grid analytics provider for utilities, retail electricity providers and independent system operators.

“The systemwide load curve is higher due to rapid population growth, and had the temperature been a few degrees hotter, demand could have blown right through the 2.3GW of reserves,” Kelly said in an email. “From a price perspective, the market design is working, but high prices alone won’t save the grid from blackouts.”

This was the first summer since the Public Utility Commission of Texas mandated changes to ERCOT’s Operating Reserve Demand Curve, a price adder that increases as reserves reach scarcity levels, that increase the likelihood and magnitude of those price adders.

However, Adam Sinn, owner of Aspire Commodities, a Houston-based energy trading company, said the ORDC produces “a perverse incentive for the operation of a safe, reliable and efficient grid.”

“The ORDC is a capacity payment, but unlike the capacity mechanisms or market put in place in other electricity markets, there are limited, if any, requirements or restrictions accompanying the payment,” Sinn said in an email Wednesday. “Thus, for example, a generator can be both the cause of an ORDC payment as well as a recipient of the payment. That does not seem to be an efficient or incentive-aligned market design element.”

Please find the article linked here and full coverage in the email below: ERCOT’s extreme prices unlikely to result in new thermal generation: experts

 

OTC GLOBAL HOLDINGS ANNOUNCES EXPANSION OF EOD MARKET DATA REPORTING TO SPAN TIME ZONES ACROSS THE GLOBAL MARKETPLACE

OTC GLOBAL HOLDINGS ANNOUNCES EXPANSION OF EOD MARKET DATA REPORTING TO SPAN TIME ZONES ACROSS THE GLOBAL MARKETPLACE

LONDON (12 August 2019) – OTC Global Holdings (OTCGH), the leading independent interdealer broker in over-the-counter commodities, announced today that it will generate EOD market data reports powered by EOXLive multiple times throughout the global business day to provide continuous coverage to clients across all continents.

In addition to the EOD market data reports EOX already generates before 3:00 p.m. CT daily, OTCGH will now generate EOD market data reports for every asset class it marks five times daily. (North American natural gas and power complex starts running at 10:00 am CT)

The five new daily EOD market data report run times are as follows:

  1. 6:45 am CT (12:45 pm GMT) – European and Asian product run*
  2. 10:00 am CT (4:00 pm GMT) – early production run, all products*
  3. 12:00 pm CT (6:00 pm GMT) – mid-day production run, all products*
  4. 2:30 pm CT (8:30 pm GMT) – main production run, all products*
  5. 4:00 pm CT (10:00 pm GMT) – late production run, all products*

*exact FTP delivery varies, and EOD reports are the “closing” cut and suitable for market to market runs in CTRM systems etc.

As with all OTCGH Market Data products, these EOD market data reports draw from the deep liquidity of OTCGH’s breadth of brokerages and leverage the company’s well-known EOXLive broking/trading platform which combines the convenience of electronic trading with voice broking’s unique ability to provide market color and create bespoke transactions.

“The global marketplace is always evolving, no matter which continent business is being conducted on,” said Campbell Faulkner, Senior Vice President at OTCGH. “We’re committed at EOX to providing round-the-clock coverage to our clients and insightful market data reports throughout the day every day to help them stay informed in every time zone.”

This new model run times join the continuously expanding suite of data resources from OTCGH, which includes end-of-day forward curve reports for: North American (NA) Natural Gas Basis and Power forward curves each with 120 months of monthly granularity, NA Natural Gas implied volatilities covering basis options markets data, Power implied volatilities covering NA electricity options, global Natural Gas Liquids forward curves, NA Power/Natural Gas forward correlations, global Crude Oil forward curves, global Coal forward curves, global Freight forward curves, European NGLs, global Refined Products, European Crude Oil, Refined Products forward curves and European Natural Gas & Power forward curves.

For more information about OTCGH please visit www.otcgh.com. To learn more about EOXLive, visit www.otcgh.com/eox or contact EOXLive via email: operations@eoxlive.com or phone: 877-737- 8511.

About OTC Global Holdings

Formed in 2007, OTC Global Holdings has become the world’s largest independent institutional broker of commodities, covering financial and physical instruments from offices in Chicago, Des Moines, Geneva, Houston, London, Louisville, New Jersey, New York and Singapore. The company is a leading liquidity provider on CBOT, ICE, NYMEX and NFX, ranking number one amongst its peers in numerous derivatives contracts across biofuels, emissions, commodity index products, crude oil, natural gas, natural gas liquids (NGLs), metals, petrochemicals and refined products, power, proppants, soft commodities, and weather derivatives. The company serves more than 450 institutional clients, including over 70 members of the Global Fortune 500, and transacts in hundreds of different commodity delivery points in Asia, Europe and the Americas. To learn more about the company, please visit www.otcgh.com or go to https://player.vimeo.com/video/146686709.

About EOX Holdings LLC

EOX Holdings LLC (EOX) is registered as an Introducing Broker with the National Futures Association (NFA). EOX delivers unique and comprehensive market data, introducing broker (IB) services and the EOXLive platform. EOXLive provides order and trade management, confirms, reporting and clearing for thousands of trader, hedger and market maker accounts. EOXLive Active Markets delivers comprehensive on-screen price discovery while keeping the important human element in the trader and broker relationship. Leveraging the liquidity of nearly 20 brokerage shops across the commodity spectrum, EOXLive customers have transparency and execution capabilities so they can trade like never before. EOX Holdings LLC is a wholly owned subsidiary of OTC Global Holdings.

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OTC GLOBAL HOLDINGS LAUNCHES EUROPEAN NATURAL GAS & POWER DATA OFFERING

LONDON (22 July 2019) – OTC Global Holdings (OTCGH), leading independent interdealer broker in over-the-counter commodities, announced today the availability of its latest data product, European Natural Gas & Power (EUGP) Forward Curves powered by EOXLive.

The new product joins existing European offerings including NGLs, Refined Products, and Crude Oil as the firm continues to expand its market data offerings into Europe and Asia. The EUGP curves provide a powerful, independent market valuation tool to support investment and trading decisions in natural gas and power markets across Europe. As with all OTCGH Market Data products, they draw from the deep liquidity of OTC Europe’s brokering groups, Oil Brokerage, Aalpha Energy, Ion Energy UK, Choice! UK, and P&P Oil. The product leverages the company’s well-known EOXLive broking/trading platform, which combines the convenience of electronic trading with voice broking’s unique ability to provide market color and create bespoke transactions in markets such as refined products and naphtha.

The EUGP product covers daily assessments of 24 fixed price locations, including Belgian, TTF, Austrian, German, Italian, NBP, French, German, Italian, Nordic, Spanish, Swiss and Great Britain power and gas. Its key features include: monthly granularity and seasonal blocks, balance of the month, a 60-month tenor produced daily, bid/ask, spark spreads, and five daily model runs available for intraday and European close.

“The European Natural Gas & Power Forward Curves is a great addition to our growing suite of data offerings in this market and another example of how OTCGH is helping traders, risk managers and other market participants make more informed decisions across the global marketplace,” said Campbell Faulkner, Senior Vice President at OTCGH.

The new product joins the continuously expanding suite of data resources from OTCGH, which includes end-of-day forward curve reports for: North American (NA) Natural Gas Basis and Power forward curves each with 120 months of monthly granularity, NA Natural Gas implied volatilities covering basis options markets data, Power implied volatilities covering NA electricity options, global Natural Gas Liquids forward curves, NA Power/Natural Gas forward correlations, global Crude Oil forward curves, global Coal forward curves, global Freight forward curves, European NGLs, global Refined Products, European Crude Oil and Refined Products forward curves.

For more information about OTCGH please visit www.otcgh.com and to learn more about EOXLive, visit the www.otcgh.com/eox or contact EOXLive via email at operations@eoxlive.com or phone: 877-737- 8511.

About OTC Global Holdings

Formed in 2007, OTC Global Holdings has become the world’s largest independent institutional broker of commodities, covering financial and physical instruments from offices in Chicago, Des Moines, Geneva, Houston, London, Louisville, New Jersey, New York and Singapore. The company is a leading liquidity provider on CBOT, ICE, NYMEX and NFX, ranking number one amongst its peers in numerous derivatives contracts across biofuels, emissions, commodity index products, crude oil, natural gas, natural gas liquids (NGLs), metals, petrochemicals and refined products, power, proppants, soft commodities, and weather derivatives. The company serves more than 450 institutional clients, including over 70 members of the Global Fortune 500, and transacts in hundreds of different commodity delivery points in Asia, Europe and the Americas. To learn more about the company, please visit www.otcgh.com or go to https://player.vimeo.com/video/146686709.

About EOX Holdings LLC

EOX Holdings LLC (EOX) is registered as an Introducing Broker with the National Futures Association (NFA). EOX delivers unique and comprehensive market data, introducing broker (IB) services and the EOXLive platform. EOXLive provides order and trade management, confirms, reporting and clearing for thousands of trader, hedger and market maker accounts. EOXLive Active Markets delivers comprehensive on-screen price discovery while keeping the important human element in the trader and broker relationship. Leveraging the liquidity of nearly 20 brokerage shops across the commodity spectrum, EOXLive customers have transparency and execution capabilities so they can trade like never before. EOX Holdings LLC is a wholly owned subsidiary of OTC Global Holdings.

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Contact:
Amy Lach
Pierpont Communications
(713) 627-2223
alach@piercom.com