DataWatch August 2014

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By Vera Tikhomolova
The Future of the
Natural Gas Market
Part Two: Global Demand and Major Consumers
ZEMA Updated
to Collect New CAISO
Data Reports
$2.5 Billion Rupee IFC
Financing Program to Strengthen
Indias Capital Markets
ZE and Interactive Data
Develop Integrated ZEMA
and FutureSource Solution
Platts to Discontinue
Electricity Assessments
in ISO Markets
AUGUST 2014
Powered by
New products and
data sources
Delisting of products
and datasources
Potential impact
on data
Changes to data
attributes, replacement
of products
Editorial 4
The Federal Agency Moves Ahead with Improving Natural Gas
Electric Power Markets Coordination:The Concept of Centralizing Natural Gas Trading Is on the Table 4
Power 7
Argus Introduces New UK OTC Base and Peak Load Assessments 7
Platts to Discontinue Electricity Assessments in ISO Markets 7
Argus Removes UK OTC Base Load Assessments 9
NYMEX Amends 98 Electricity Futures 10
Petroleum 12
Platts to Create M+4 Cash BFOE Assessment 12
Platts Launches New US Gulf Coast Clean Tanker Assessments 12
Platts Starts 500 CST Rotterdam Barge Assessment 13
Argus Adds Calendar Month Average Values to Crude Publication 13
Argus Creates New Series in Marine Fuels Publication 13
Argus Lists New Assessments in Russian Motor Fuels Publication 14
Argus Adds Refinery Gate Values and Netbacks to Crude Publication 15
IHS Introduces New Drilling and Completions Solution 15
Platts to Remove Q1, Q2 Benzene Assessments and Toluene Assessments 16
Platts to Cease Publishing Middle East M2 LPG Differentials 16
Platts Discontinues Urals CFD Outrights 17
NYMEX Delists the NY ULSD vs. Low Sulfur Gasoil Contract 17
Platts to Assess Minas, Tapis Crude Using Full Cargoes 17
NYMEX Permits Block Trading in Brent Crude Oil Weekly Options 18
Natural Gas 19
PEGAS Introduces Trading in Gas Spot Contracts for British National Balancing Point 19
NGX and Alliance Pipeline Launch Services at New US Trading Hub 19
EEX to Start Trade Registration Service for Futures on the Brent 901 Formula 20
NYMEX Lists New Natural Gas Weekly Financial Option 21
NYMEX Removes Three Texas Gas SL Futures 22
NYMEX Permits Block Trading in Natural Gas Weekly Financial Options 22
Coal 23
Platts Introduces Daily Coal Switching Price Indicator for UK and Netherlands 23
Platts Launches CFR India 5,500 NAR Thermal Coal Prices 23
New Coal Daily Differential Assessment to Be Added to Argus/McCloskey Coal Price Index 24
ICAP Energy Introduces Global Coking Coal Desk 24
FIS Brokers First Trades on SGX CFR China and FOB Australia Coking Coal Contracts 25
Platts to Remove CFR India 5,900 GAR Prices 26
Platts Discontinues Monthly Coking Coal 90-Day Forward Assessments 26
NYMEX Delists Australian Coking Coal Futures 26
Softs and Metals 27
Platts Begins Publishing Daily London Silver Price 27
Platts Starts CIF NWE Industrial Wood Pellet Assessment 27
Argus Adds New Argentine SME Upriver Price Assessments 28
Platts Discontinues NWE Non-RED SME Biodiesel Assessment 28
Platts to Cease Publishing Weekly FOB China Tungsten Prices 29
Platts to Remove Daily Kuala Lumpur Tin Price 29
Platts to Stop Publishing In-Warehouse Singapore Tin Premium 29
Platts to Discontinue Daily In-Warehouse Singapore Lead Premium 29
Platts to Cease Publishing FOB China Antimony Price 30
Platts to Take Out Weekly CIF Japan Indium Price 30
Platts to Refrain from Publishing East Asia Steel Beam, Bar Assessments 30
Platts to Cease Publishing East Asian Rebar, Rod Assessments 30
Platts to Discontinue East Asian Flat Steel Prices 31
Platts to Halt China Domestic Stainless CR 201 Price 31
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August 2014 3
Platts to Stop China Domestic Pig Iron Price Assessment 31
Argus Removes Non-RED Assessments from Biofuels Publication 31
COMEX Delists ME Alcoa Aluminum Brand 31
COMEX Removes E-Mini Silver Futures Contract 32
CME Stops 17 Livestock, Dairy, and Lumber Options 32
Eurex Temporarily Suspends Trading in Silver Derivatives with Codes FSFX and OSFX 34
Finance 35
New Equity Options Introduced on Euronext N.V. 35
ISDA Publishes 2014 Credit Derivatives Definitions Protocol 35
IFC Creates $2.5 Billion Rupee Financing Program to Strengthen Indias Capital Markets 36
Exegy, TMX Datalinx, and FIF Launch MarketDataPeaks Service in Canada 37
Deutsche Brse Creates US Dollar Hedged Version of HDAX 37
Two New ETNs from Boost Launched on Xetra 38
ICE Acquires Trading Technology Patents 39
Traiana Introduces Enhanced Cross-Asset Matching Engine 39
ICAP Information Services and MTS Add Eurozone Index to RepoFunds Rate 39
CME Launches New Futures and Options for Delivery of Standardized Bundle Combinations 40
CME Clearing Europe Receives EMIR Authorization 41
Thomson Reuters Begins Elektron Direct Feed 41
Thomson Reuters Eikon Expands Access to Dubai Mercantile Exchange 42
NASDAQ OMX Adds First Trust Strategic Income ETF 42
NASDAQ OMX Lists First Trust Enhanced Short Maturity ETF 43
NASDAQ OMX Introduces Compass EMP US Discovery 500 Enhanced Volatility Weighted Index ETF 43
CME Delists T-Bill Futures, Index Swap Futures and Options, and HICP Futures 44
CME Removes Four Interest Rate Contracts 44
HKFE Announces Revised Margins for CITIC Pacific and HKEx Futures 44
ICE Benchmark Administration Completes ISDAFIX Transition 45
Deutsche Brse and Philippine Stock Exchange Sign MOU 46
Weather and Emissions 47
AccuWeather Updates Windows Phone App to Include MinuteCast for Global Locations 47
EIA Mapping Tool Shows US Energy Facilities in Areas at Risk of Flooding 48
Other 49
NYMEX Introduces Capesize 2014 Timecharter Average (Baltic) Futures 49
Baltic Exchange and Chinas Xinhua News Agency Release Shipping Center Index 49
Platts to Cease Publishing NWE Oxo-Alcohols Assessments 51
News from Data Vendors 52
ZEMA Updated to Collect New CAISO Data Reports 52
PEGAS: Trading Results in July 55
PEGAS to Launch Spot Contracts for NBP 57
EPEXSPOT: French Day-Ahead Awakens 58
Asia-Pacific Condensate Market Transformation Prompts New Argus Index 60
OTC Global Holdings Adds Forwards for Crude Oil 61
Monthly Market Analysis 61
Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX) 62
Crude Oil Brent vs. WTI: Forward Curve (NYMEX) 63
North American Natural Gas Spot Prices (ICE) 64
Henry Hub Natural Gas Forward Curve (ICE) 65
Actual Weather (AccuWeather) 66
Electricity: Day-Ahead Prices (ICE) 67
InDepth 69
The Future of the Natural Gas Market
Part Two: Global Demand and Major Consumers 69
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The Federal Agency Moves
Ahead with Improving
Natural Gas Electric Power
Markets Coordination:
The Concept of Centralizing Natural
Gas Trading Is on the Table
By Olga Gorstenko
August 2014 4
With natural gas-fired power plants taking
an increasingly larger share of the electricity
mix, the need for seamless transacting and
exchanging of information between
power producers and gas pipeline operators
is becoming critical. The U.S. Federal Energy
Regulatory Commission (FERC) is taking
another step towards bridging the gap
between the natural gas and electric power
industries. On August 19, 2014, the
Commission announced that on
September 18, 2014 it will launch an
industry discussion about the potential for
the centralization of natural gas procurement
and transacting processes.
In the last five years or so, the U.S. energy
sector has been changing along two planes:
the increase in renewable generation
capacity and booming natural gas
production. Renewables have been driven
mainly by political agendas worked out on
different levels of government: local (state)
authorities have been implementing
renewable energy portfolio requirements,
and federal bodies have been
supporting them indirectly by tightening
emission standards and directly through
subsidies. At the same time, the expansion
of natural gas production has not been
closely tied to politicians aspirations;
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August 2014 5
instead, it has been driven mainly by the
greenback almighty, or euphemistically
speaking - economic factors. Meanwhile,
regardless of drivers, both of these sources
have contributed to the same outcome:
natural gas-fired generation capacity has
been constantly increasing.
On the one hand, increased natural gas
production has been suppressing gas
prices; as a result, power producers and
utilities keep switching to this type of fuel. On
the other hand, managing the intermittency
of renewable power production requires
additional support.
Given the infant
stage of energy
storage solutions,
the most optimal
support can
be found in
dependable
generators serving
as ancillary
services. Of these
services, natural
gas units remain
natural leaders due
to the currently lower
fuel cost and faster
response time. Hence, the growth in
renewables has been accompanied by
growth in supporting gas-fired units. Also,
due to rising environmental compliance
costs, coal-fuelled generators leave a lot of
space for gas units to fill in. The power
industrys increased use of natural gas puts
more pressure on gas suppliers; the
expanded use of ancillary services requires
more flexibility in scheduling this supply.
The growing interdependence between the
natural gas and power markets has become
not only apparent, but even taxing because
of gaping differences in how these two
industries schedule their services and
conduct resource planning. The need for
increased coordination between them has
been raised over the last several years on the
national level by FERC. Read about this in
Coordination of Gas and Electric Industries:
Increasing Transparency?
FERC has taken the lead by attempting to
mitigate and eliminate these disparities in a
structured and standardized manner. Over
last several months, the Commission has
conducted multiple
workshops and
meetings; it has
also sought written
submissions from
both industries in
order to find
collective ground
and solutions.
Abundant with
updates, FERCs
quarterly progress
reports reflect the
following premise:
given the great
disparities amongst
existing processes and procedures, the
coordination of efforts between these two
industries is better carried out on a regional
basis. After two years of effort, FERCs
reports continue to be structured by
regional initiatives.
It really is not an easy task for the
Commission to develop processes that will
be accepted by all parties. The attempt to
realign the scheduling processes of
interstate gas pipelines and public utilities is
a good example of this. As per FERCs report
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The growing interdependence
between the natural gas
and power markets has
become not only apparent,
but even taxing because
of gaping differences in how
these two industries schedule
their services and conduct
resource planning.
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August 2014 6
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Editor
Olga Gorstenko
Phone: 778-296-4183
Email: olga@ze.com
Olga Gorstenko
Advertising & Vendor Relationships
Bruce Colquhoun, Phone: (604) 790-3299
Email: bruce.c@ze.com
Have an idea for an article or would like to
contribute to an upcoming issue? Write to us at
datawatch@ze.com
To get real-time data updates, follow
@zedatawatch on Twitter
To access previous issues of ZE DataWatch,
go to datawatch.ze.com
ZEMA Suite Inquiries
Bruce Colquhoun, Phone: (604) 790-3299
Email: bruce.c@ze.com
from June 19, 2014, after multiple meetings
that invited industry participants to
consider FERCs Notice of Proposed
Rulemaking (NOPR) and develop
consensus-based alternatives to the
proposal, Viewpoints on the Gas Day were
split, with a super-majority of the gas
industry supporting the current Gas Day start
time of 9:00 a.m. Central and a super-
majority of the electric industry supporting
moving the Gas Day to 4:00 a.m. Central. In
the end, FERC agreed to disagree and left
related standards as fill in blank.
Now, FERC is pushing even harder and
aiming way higher by commencing a
discussion on centralized natural gas
trading. There are two objectives for this
discussion, the first of which is less
ambitious: finding ways to improve natural
gas trading. Several topics on this subject for
the forum include:
The near real-time flexibility (e.g. changing or
confirming nominations) required for
gas-fired generation to ramp on short notice.
The physical and information requirements
needed to provide such flexibility on a
standardized basis.
The coordination of confirmation
processes across pipelines to support
trading opportunities.
Improvements like the ones listed above,
although not simple to implement, are still
eclipsed by the discussions major
objective: assessing the concept of a
centralized trading platform for natural gas.
Not short of grandeur, the idea of a
centralized marketplace for natural gas is
somewhat revolutionary. No doubt,
developing a trading platform that would
report bids and offers for trading commodity
and capacity for receipt and delivery points
across multiple pipeline systems, all
displayed in a transparent manner, will face
a lot of resistance and draw a lot of blood.
No matter what, I wish FERC the best of luck
(no sarcasm intended) and hope to witness
the realization of its aspirations, whether this
will take two or even five years to implement.
Do I dare say (or even think) that the power
industry will follow? Historically speaking,
this has been the case.v
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Argus Introduces New UK OTC Base
and Peak Load Assessments
On August 25, 2014, Argus introduced new assessments to its Argus European Electricity
publication. The following new series have been included in the DEL files in the DAEE folder of
server ftp.argusmedia.com.
PA Code Time Stamp Price Type
Continuous
Forward
Description
PA0012598 6 4 1 UK OTC base load index month
PA0012598 6 33 1 UK OTC base load index month
PA0012600 6 1 6 UK OTC base load month
PA0012600 6 2 6 UK OTC base load month
PA0012603 6 29 0
UK OTC base load volume current
month
PA0012604 6 29 1 UK OTC base load volume month
PA0012604 6 34 1 UK OTC base load volume month
PA0012607 6 1 6 UK OTC peak load month
PA0012607 6 2 6 UK OTC peak load month
See the original announcement.
ZEMA collects a range of European power market data, including numerous records from Argus. To learn more, visit
http://www.ze.com/the-zema-solutions/.
Platts to Discontinue Electricity Assessments in ISO Markets
After flow date December 1, 2014, Platts will no longer publish price assessments for
markets served by an independent system operator. Platts noted in its related press release
that price assessments are largely redundant given the day-ahead, on-peak, and off-peak
prices ISOs publish. Platts also claimed that ISO auctions provide price transparency for a
much larger number of hubs and zones than are traded in the bilateral market.
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Below are the day-ahead, weekend and
near-term bilateral indexes that Platts
will discontinue:
AD Hub
Dominion Hub
Entergy, into
ERCOT, Houston
ERCOT, North
ERCOT, South
ERCOT, West
Illinois Hub
Indiana Hub
MAPP, South
Mass Hub
Michigan Hub
Minnesota Hub
N.Y. Zone-A
N.Y. Zone-G
N.Y. Zone-J
NI Hub
NP15
Ontario
PJM West
SP15
SPP, North
Instead of publishing bilateral price
assessments in ISO markets, Platts will
publish on-peak and off-peak averages for
real-time or hourly prices. This will
complement the on-peak and off-peak
averages for day-ahead prices Platts
currently publishes. In addition to all the
locations currently covered by day-ahead
averages, average hourly prices for Alberta
and Ontario also will be published.
Given its renewed focus on the less
transparent physical bilateral markets, Platts
is seeking comment on additional locations
in the Southeast and West for new bilateral
day-ahead price assessments. There are a
number of delivery locations outside of the
ISOs traded in the physical markets.
In general, Platts prefers to price one specific
location, normalizing transactions from
nearby locations. But in some cases a
basket approach using multiple locations is
considered best by the organization.
Platts is proposing day-ahead,
bilateral market assessments for the
following delivery locations:
Into GTC: Georgia Transmission
Corp. system
John Day: The substation for the John Day
Dam in Washington State
NOB: The Nevada-Oregon Border, which is
the interface with Pacific DC Line
Montana: A basket of delivery locations
within the state of Montana
Wyoming: A basket of delivery locations
within the state of Wyoming
Borah: A substation in
South-Central Idaho
Craig: A substation in Western Colorado
associated with the Craig coal-fired
power plant
Ault: A substation in
Northeastern Colorado
Pinnacle Peak: A group of substations
Northeast of Phoenix, Arizona
Westwing: A substation Northwest of
Phoenix, Arizona
Industry participants who would like to
provide feedback or report transactions for
delivery at these locations should email
mark.callahan@platts.com and
pricegroup@platts.com.
The ZEMA graph in this example
demonstrates the correlation between ISO
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New England Swap Futures and Henry Hub Gas Futures. As the green line shows, the
correlation is non-zero and is close to 1, meaning there is a strong correlation. This data is
taken from the NYMEX Future Settlements report, and the correlation formula is from ZEMAs
formula library. Tracking the relationship between ISO and natural gas data is easy using
ZEMAs visualization and analytical tools.
Argus Removes UK OTC Base Load Assessments
On August 25, 2014, Argus removed numerous assessments from its Argus European
Electricity publication.
For most of the assessments listed below, the next phase of the EFA contract expiry schedule
was the end of all the EFA month contracts on August 22, 2014. The start of the sixth forward
Gregorian contract month was on August 25, 2014. However, the UK OTC base load volume
current EFA month code listed below continues until the end of the EFA September month, as
the current month (September) is still within the existing EFA schedule.
Continuous
Forward
Description
PA0002670 6 1 1 UK OTC base load EFA month
PA0002697 6 1 1 UK OTC peak load EFA month
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Continuous
Forward
Description
PA0002697 6 2 1 UK OTC peak load EFA month
PA0002818 6 4 1 UK OTC base load index EFA month
PA0002818 6 33 1 UK OTC base load index EFA month
PA0003023 6 29 1 UK OTC base load volume EFA month
PA0003023 6 34 1 UK OTC base load volume EFA month
PA0003026 6 29 0
UK OTC base load volume
current EFA month
NYMEX Amends 98 Electricity Futures
Effective August 18, 2014, the New York Mercantile Exchange, Inc. (NYMEX) amended the
termination of trading rules for 98 electricity futures contracts for trades that are executed
electronically on the CME Globex trading platform. The termination of trading schedule for
open outcry trading on the NYMEX trading floor and for submission for clearing through CME
ClearPort remain unchanged. These amendments were made to more clearly distinguish the
contract specifications from the trading functionalities available to these contracts based on
the type of futures contract (i.e., monthly, daily, etc.).
In general, day-ahead daily contracts now cease trading on CME Globex at 4:15 p.m. Chicago
Time/CT on the business day prior to the contract day. Day-ahead monthly contracts cease
trading on CME Globex at 4:15 p.m. CT on the last business day of the month preceding the
contract month.
Real-time daily contracts cease trading on CME Globex at 11:59 p.m. local time of the
associated independent system operator/regional transmission organization on the contract
day. If that time is not within CME Globex regular trading hours, real-time daily contracts cease
trading on CME Globex at 4:15 p.m. CT on the nearest business day on or before the contract
day. For example and assuming no holidays, Sunday through Thursday real-time daily
contracts will cease trading at 11:59 p.m. local time on the calendar day that is the contract
day, which is technically the next business day (trade date) on CME Globex. Friday and
Saturday real-time daily contracts terminate at 4:15 p.m. CT on Friday.
Real-time monthly contracts cease trading on CME Globex at 11:59 p.m. local time on the
last calendar day of the month preceding the contract month. If that time is not within CME
Globex regular trading hours, real-time monthly contracts cease trading on CME Globex at
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4:15 p.m. CT on the nearest business day on
or before the last calendar day of the month
preceding the contract month. For example
and assuming no holidays, if the last
calendar day of the month preceding the
contract month falls on a Sunday through
Thursday, a real-time monthly contract will
cease trading at 11:59 p.m. local time on
that day. If the last day of the month prior to
the contract month falls on a Friday or
Saturday, the real-time monthly contract
will cease trading on CME Globex at
4:15 p.m. CT on Friday.
The subject contracts are listed for trading on
CME Globex and the NYMEX trading floor, as
well as for submission for clearing through
CME ClearPort. The trading hours for open
outcry are Monday Friday 9:00 a.m.
2:30 p.m. New York Time/NYT (8:00 a.m.
1:30 p.m. CT). The hours for CME Globex and
CME ClearPort are Sunday Friday
6:00 p.m. 5:15 p.m. NYT (5:00 p.m.
4:15 p.m. CT) with a 45-minute break
each day beginning at 5:15 p.m. NYT
(4:15 p.m. CT).
To view a full list of impacted contracts,
see the original announcement.
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August 2014 12
Platts to Create M+4 Cash
BFOE Assessment
On October 1, 2014, Platts will launch a
cash BFOE assessment to reflect four
forward Brent monthly contracts ahead of
the month of publication (M+4).
This instrument will complement Plattss
existing cash BFOE assessments, which
currently reflect one, two, and three months
ahead of the month of publication. Platts will
also launch an exchange of futures for
physical (EFP) assessment to reflect the EFP
for M+4 Brent.
The new assessments will be published
alongside Plattss existing cash BFOE and
EFP assessments in Platts Crude Oil
Marketwire, Platts Oil Price Report, and
Platts Global Alert pages 1210 and 1212.
Enhance your market analysis using real-time crude oil
and petroleum product price data in ZEMA, ZEs data
management solution for oil market participants. To learn
more, book a complimentary ZEMA demonstration.
Platts Launches New US
Gulf Coast Clean
Tanker Assessments
On August 1, 2014, Platts launched two
new clean medium range tanker freight
rate assessments for the U.S. Gulf
Coast. These assessments reflect newly
established supply trends of refined
products out of the region, in the wake
of major changes to refining capacity
in the southern U.S.
The new assessments U.S. Gulf Coast to
Argentina and U.S. Gulf Coast to Brazil will
reflect strong market interest in these routes
for clean medium range tankers. The new
assessments reflect modern MR tonnage.
Each assessment will be published on a
worldscale basis to reflect how these routes
are traded. Platts will also publish a dollars
per metric ton value for these routes.
Further information about the assessments
is provided below:
U.S. Gulf Coast to Argentina: This
assessment reflects a 38,000 mt clean
MR tanker from the U.S. Gulf Coast to
Argentina, and reflects the increased
amount of refined products leaving the
U.S. Gulf Coast. The assessment reflects
loadings from Houston and New Orleans
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August 2014 13
and discharge into major Argentine ports,
including Buenos Aires and La Plata.
U.S. Gulf Coast to Brazil: This assessment
reflects a 38,000 mt, clean MR tanker
from the U.S. Gulf Coast to Brazil, and
reflects the increased amount of refined
products leaving the U.S. Gulf Coast. The
assessment reflects loadings from
Houston and New Orleans and discharge
into Santos, Tramandai and Salvador.
These new assessments are published
in Platts Clean Tankerwire and Platts
Tanker Alert.
Platts has also detected interest in a further
assessment reflecting the value of supply
routes into northern Brazil, and will
separately study the potential for
this assessment.
Platts Starts
500 CST Rotterdam
Barge Assessment
On August 1, 2014 Platts launched a new
assessment for 500 CST, 3.5% sulfur fuel oil
barges, FOB basis Rotterdam. The new
assessment is published alongside all
existing Rotterdam fuel oil barge
assessments, and separately from a new
500 CST bunker fuel assessment.
The specification reflected in the new
assessment conforms to ISO 8217: 2010
specifications, category ISO-F, RMK 500.
Specification and assessment parameters
are detailed in Plattss Europe and Africa
Refined Oil Products Methodology and
Specifications Guide.
The assessment reflects the value of barges
at 16:30 London time, for oil loading 3 to
15 days forward from Monday-Tuesday,
and 5 to 15 days forward from
Wednesday-Friday. During U.K. public
holidays this schedule and time may
change, and Platts will publish changes
to its typical publishing schedule when
the need arises. The assessment will
reflect a barge size of 2,000 mt.
Platts will publish bids, offers and
interest to trade RMK 500 CST barges, FOB
basis Rotterdam, in front-end, middle-
window and back-end loading ranges (FE,
MW, and BE, respectively), as in Plattss
other European fuel oil barge market on
close assessment processes.
ZEMA combines strengths in oil market data collection,
visualization, and analysis, equipping traders and ana-
lysts to make informed business decisions. To learn more,
book a complimentary ZEMA demonstration.
Argus Adds Calendar
Month Average Values to
Crude Publication
On October 1, 2014, Argus will add calendar
month average values for the daily refinery
gate value and netback values introduced on
September 1 to its Argus Crude publication.
These series will have a continuous forward
rate of 1.
To view a complete list of new values,
see the original announcement.
Argus Creates New Series in
Marine Fuels Publication
On September 2, 2014, Argus added new
codes to its Argus Marine Fuels publication.
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New series were added to the dmarinef files in the DAMarineF folder of server
ftp.argusmedia.com.
New series have a time stamp of 26 (excluding Panama Canal assessments, which have a
time stamp of 2); are price types 1, 2, and 8; and have a continuous forward rate of 0.
PA Code Description
PA0013982 Fuel oil bunker HS 380cst dob Ust-Luga (anchorage)
PA0013983 Fuel oil bunker HS 180cst dob Ust-Luga (anchorage)
PA0013986 Fuel oil bunker HS 380cst dob Ust-Luga (berth)
PA0013987 Fuel oil bunker HS 180cst dob Ust-Luga (berth)
PA0013992 Gasoil bunker MGO dob Ust-Luga (anchorage)
PA0013993 Gasoil bunker MGO dob Ust-Luga (berth)
PA0015037 Gasoil bunker Panama Canal 0.1% sulphur
ZEMA collects a range of Argus crude assessment data, including data from the European Crude (Spot Prices) record
and the Argus Crude record. To learn more, visit http://www.ze.com/the-zema-solutions/.
Argus Lists New Assessments in Russian Motor Fuels Publication
On September 1, 2014, Argus introduced new Jet/Kerosine fca Orsk assessments and
Orsk-Kazakhstan indexes. The following information will appear in the DAMTR data module in
the /DAMTR folder of server ftp.argusmedia.com:
PA Code
Time
Stamp
Price
Type
Continuous
Forward
Description
PA0015000 26 1 0 Jet/Kerosine fca Orsk
PA0015000 26 2 0 Jet/Kerosine fca Orsk
PA0015001 0 4 0 Jet Orks-Kazakhstan (Astana) del price index
PA0015002 0 4 0 Jet Orks-Kazakhstan (Alma-Ata) del price index
PA0015003 0 4 0 Jet Orks-Kazakhstan (Aktobe) del price index
PA0015004 0 4 0 Jet Orks-Kazakhstan (Atyrau) del price index
PA0015005 0 4 0
Jet Orsk-Kazakhstan (Karaganda)
del price index
PA0015006 0 4 0 Jet Orsk-Kazakhstan (Uralsk) del price index
PA0015007 0 4 0
Jet Orsk-Kazakhstan (Ust-Kamenogorsk) del
price index
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August 2014 15
Argus Adds Renery Gate Values and Netbacks
to Crude Publication
On September 1, 2014, Argus added a range of new refinery gate values and netbacks
for both simple and complex models to selected crude grades for North Western Europe,
Asia, and the U.S. Gulf Coast. New assessments were added to the DLC.CSV files in the
/DCRDEEU folder of server ftp.argusmedia.com.
To view a complete list of new assessments, see the original announcement.
IHS Introduces New Drilling and Completions Solution
On August 19, 2014, IHS Inc. (IHS) announced that it has launched the IHS Drilling and
Completions Solution, an operator-only membership service designed to provide oil and gas
operators (especially drilling engineering teams) with current and historical drilling data, as
well as the performance benchmarking analysis derived from that data.
The IHS Drilling and Completions Solution is organized into four regions of coverage that
model the organizational structure of many operators, including the Rocky Mountain/West
group, the Midcontinent Southeast group, the Northeast group, and the Gulf of Mexico group.
This offering employs a data analysis software tool that integrates two existing services the
IHS Offset Drilling Data and IHS Drilling Performance Benchmarking solutions. The solutions
database includes more than 26,000 historical, public offset well records with drilling data
(mud, chemicals, BHA) and operational event information.
The converged data accounts for more than 9,000 operator-provided performance
benchmarked wells.
ZEMA, ZEs data management solution for oil market participants, collects over 650 oil records on a daily basis.
Market participants can then transform this data into market intelligence using ZEMAs library of analytic formulas. To
learn more, visit http://www.ze.com/the-zema-suite/.
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August 2014 16
Platts to Remove Q1, Q2 Benzene Assessments
and Toluene Assessments
On January 2, 2015, Platts will discontinue its Q1 and Q2 CIF ARA benzene assessments
and its T2 FOB ARA nitration-grade toluene assessment because of a lack of liquidity in
these markets. These prices can be found on Platts Petrochemical Alert and in the
Europe and Americas Petrochemicalscan.
Platts will continue to assess TDI-grade toluene basis FOB ARA in Europe.
The following assessments will be affected:
Code Monthly Average Weekly Average
Benzene CIF ARA Q1 AAIBN00 AAIBO00
Benzene CIF ARA Q2 AAIBP00 AAIBQ00
Toluene T2 FOB ARA PHAFW00 HBFM03 PHAFV04
Toluene T2 FOB ARA M1 AAXOK00 AAXOK03 AAXOK04
Toluene T2 FOB ARA M2 AAXOL00 AAXOL03 AAXOL04
Platts to Cease Publishing Middle East M2 LPG Dierentials
On September 1, 2014, Platts discontinued its assessments of physical market
premiums for refrigerated propane and butane cargoes loading in the Middle East LPG market
in the second month ahead due to changing market conditions.
Platts continues to assess spot premiums for the month ahead and the spot market, which is
20-40 days ahead. All premiums reflect the spot value of refrigerated LPG cargoes versus the
Saudi Aramco contract price that prevails for the loading period.
Platts has been assessing second-month propane and butane cash differentials since
December 2002. Since that time, spot market activity revolving around the second month
forward has dipped, and trading in far-forward cargoes is no longer typical in the Persian Gulf.
These assessments are published on Platts Global Alert, LP Gaswire, and in the Platts price
assessment database under symbols AALAM00 (refrigerated propane M2 cash differential)
and AALAN00 (refrigerated butane M2 cash differential).
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August 2014 17
Platts Discontinues Urals CFD Outrights
On August 1, 2014, Platts ceased publishing outright values associated with Northwest
European and Mediterranean Urals CFD markets. Platts discontinued these values, which are
generated by applying assessed CFD values to Dated Brent, following feedback from the
market that providing these outright values was not valuable.
These markets trade as differentials, and Platts will continue to publish assessments for
those differentials in both the Northwest European and Mediterranean Urals CFD
markets. These assessments will continue to be published on Platts Global Alert
page 1616 and 1618, respectively, and in Platts Crude Oil Marketwire.
NYMEX Delists the NY ULSD vs. Low Sulfur Gasoil Contract
On July 28, 2014, NYMEX delisted the following product from CME Globex, CME
ClearPort, and the NYMEX trading floor. There is currently no open interest in this product.
Product Name Clearing Code GLOBEX Code
NY ULSD vs. Low Sulfur Gasoil Contract SLS SLS
Platts to Assess Minas, Tapis Crude Using Full Cargoes
On December 1, 2014, Platts will begin to base its assessments on full cargoes
for Malaysias Tapis crude oil and Indonesias Minas crude oil. Through this proposed change,
Platts will discontinue the use of the partials mechanism to assess Minas and Tapis. Instead,
Platts will continue to publish bids, offers, and transactions for full parcels of either grade.
Platts proposes to amend the cargo size reflected in these grades to 100,000 barrels for
Minas (down from 200,000 barrels currently) and 300,000 barrels for Tapis (down from
450,000 barrels currently), in line with existing trade in these grades.
These proposed changes reflect evolving dynamics in Southeast Asias crude oil
markets. Crude oil available for trade in the spot market is generally trading in smaller
physical loading sizes.
Currently the partials mechanism for Minas leads to a convergence of a 200,000 barrel cargo
of the grade following the accumulation of 8 partials of 25,000 barrels from a single seller.
The partials mechanism for Tapis leads to the convergence of a cargo of 450,000 barrels
following the accumulation of 18 partials of 25,000 barrels from a single seller.
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August 2014 18
NYMEX Permits Block Trading in Brent Crude Oil
Weekly Options
On August 18, 2014, NYMEX began to permit block trading for the following product:
Product Title Block Trade Minimum Threshold
Brent Crude Oil Weekly Options 10 contracts
The ZEMA graph below shows a Brent-WTI spread from May 2014August 2014 using
future settlements pricing data. The data pictured is from NYMEX Future Settlements;
the spread is calculated by subtracting WTI from Brent using a ZEMA formula. The intu-
itive ZEMA solution enables users to compare forecasting models with actual prices to help
improve upon forecasting methods.
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August 2014 19
PEGAS Introduces
Trading in Gas Spot
Contracts for British National
Balancing Point
On October 15, 2014, PEGAS will introduce
trading in gas spot contracts for the British
National Balancing Point (NBP) under the
rulebook of EEX. Market participants will
have access to the NBP products via the
existing PEGAS platform. Trading in the NBP
spot contracts will be available 24/7
according to the existing offering on the
PEGAS Spot Market.
For the new products, participants will
be exempt from trading, clearing, and
delivery fees for six months from
October 15, 2014 onwards.
The following products will be available for
the NBP market area:
NBP Natural Gas Within Day Contracts
NBP Natural Gas Day Ahead Contracts
NBP Natural Gas Saturday Contracts
NBP Natural Gas Sunday Contracts
NBP Natural Gas Weekend Contracts
NBP Natural Gas Individual Days
All contracts will be traded in GBP pence
per therm. The minimum price tick will
be 0.001 GBP pence/therm, and the
minimum lot size for all spot contracts will be
1,000 therm/day.
The subject of each contract is the
delivery of natural gas with a
constant output of 1,000 therm/day
( 29.3071 MWh/day) from 7:00 a.m. CET
(6:00 a.m. U.K. time) on each delivery day of
the delivery period until 7:00 a.m. CET
(6:00 a.m. U.K. time) on the following
calendar day. Trading ends 3 hours prior to
the beginning of the delivery period.
At a later stage, PEGAS will launch spot
contracts for the Belgian hub Zeebrugge
Beach (ZEE), as well as the associated
location spread between ZEE and NBP.
ZEMAs advanced data collection, validation, and dash-
board reporting functionalities help natural gas market
participants gain enhanced business intelligence. To
learn more, book a complimentary ZEMA demonstration.
NGX and Alliance Pipeline
Launch Services at New US
Trading Hub
On July 28, 2014, NGX and Alliance Pipeline
announced the addition of the
Alliance Chicago Exchange market hub (APC-
ACE) as a cleared trading point on NGX.
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The service offers natural gas clearing and trading at the APC-ACE location via NGX, which is a
wholly-owned subsidiary of TMX Group that offers trading and clearing services for natural gas,
crude oil, and electricity contacts.
The ZEMA graph below shows the prices of the top six major U.S. natural gas hubs and
their respective future settlements pricing. The data pictured is from NYMEX Future
Settlements; it was transformed in ZEMAs formula library, where each hubs price was
added to the benchmark Henry Hub. ZEMAs powerful visualization functionalities enable
analysts to quickly compare hub prices.
EEX to Start Trade Registration Service for Futures
on the Brent 901 Formula
On September 8, 2014, the European Energy Exchange (EEX), together with its clearing
house, European Commodity Clearing (ECC), will introduce a trade registration service for
futures on the Brent 901 formula.
In this context, the Argus Brent 901 Index, converted to Euro/MWh, will form the underlying
settlement price for new futures. This index is a delayed nine-month average of Argus price
assessments for North Sea Crude. The index is published daily by the energy and commodity
information service provider Argus Media. The methodology used to calculate the Argus Brent
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901 Index can be found at the Argus website http://www.argusmedia.com/
Methodology-and-Reference/ under Argus European Natural Gas.
The Brent 901 formula is widely used in pricing long-term gas supply contracts, especially for
pricing the Italian energy market.
NYMEX Lists New Natural Gas Weekly Financial Option
On September 8, 2014, the New York Mercantile Exchange (NYMEX) will list a new
natural gas weekly financial option contract for trade on the NYMEX trading floor and
CME Globex. This contract will also be available for submission for clearing through
CME ClearPort.
Relevant information is included below:
Title
Commodity
Code
Rule Chapter First Listing Listing Period
Contract
Size
Natural Gas
Weekly Financial
Option
LN1-LN5 1006
September 12,
September 19,
September 26,
October 3
Four weekly
expirations
10,000
MMBTU
To receive the latest updates on the U.S. natural gas boom, use ZEMA, ZEs data management solution for natural gas
market participants. ZEMA collects data from over 600 natural gas records on a daily basis. ZEMA users can then
transform this data into market intelligence using ZEMAs extensive library of analytic formulas. To learn more, visit
http://www.ze.com/the zema-suite/.
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NYMEX Removes Three Texas Gas SL Futures
On August 11, 2014, NYMEX delisted three Texas Gas SL futures contracts, as set out
in the table below. The contracts were listed for trading on the NYMEX trading floor and CME
Globex; they were available for submission for clearing through CME ClearPort. There was
no open interest in these contracts.
Relevant information has been removed from the NYMEX Rulebook.
Product Name Clearing Code Globex Code Rulebook Chapter
Texas Gas, Zone SL Natural Gas (Platts
Gas Daily) Swing Futures
J7 TJ7 679
IFERC) Basis Futures
TB TBN 772
Gas Daily/Platts IFERC) Index Futures
S7 S7 834
NYMEX Permits Block Trading in Natural Gas
Weekly Financial Options
On September 8, 2014, NYMEX will begin to permit block trading for the following product:
Product Title Block Trade Minimum Threshold
Natural Gas Weekly Financial Options 10 contracts
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Platts Introduces Daily Coal
Switching Price Indicator for
UK and Netherlands
On August 1, 2014, Platts began publishing a
daily coal switching price indicator (CSPI) for
the U.K. and the Netherlands that calculates
the threshold needed for gas prices to be
more competitive than coal prices as input
fuel in power generation.
The CSPIs will be used for the month-ahead,
quarter-ahead, and year-ahead periods in
each market and will include both 45% and
50% high heating value (HHV) gas-fired plant
efficiency. The indicators are calculated
using Plattss corresponding assessments for
coal and EUAs, which are currently published
in European Power Daily and Coal Trader
International. The coal switching price
indicators for 50% efficiency will be
published in European Power Daily and
European Gas Daily, while price indicators
for both 45% and 50% efficiency will be
published on European Power Alert and in
Platts Market Data category EM.
To learn how many LNG industry participants use
ZEMA to enhance their data collection, validation,
and visualization processes, book a complimentary
ZEMA demonstration.
Platts Launches
CFR India 5,500 NAR
Thermal Coal Prices
On August 1, 2014, Platts began
publishing a daily spot price
assessment for thermal coal delivered
to East and West Coast Indian ports with a
calorific value of 5,500 kcal/kg on a net-
as-received (NAR) basis. The new assess-
ments will take into account thermal coal
trades in the spot market in a 30-60 day
forward window on a cost and freight and
delivered to India basis.
The standard specification for the
assessment, named CFR India 5,500 NAR,
is as follows: a gearless Panamax shipment
of 75,000 mt, a standard calorific value of
5,500 kcal/kg on a NAR basis with typical
total sulfur content of 0.80% as received,
typical ash of 20% as received, and typical
total moisture of 8.5% as received.
Platts considers as relevant to the
assessment process coals of a merchantable
quality of 5,300-5,700 kcal/kg NAR, sulfur
up to 1%, ash content up to 23%, and total
moisture up to 20%, normalized to the
standard specifications.
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For CFR India, Platts takes into consideration cargoes for discharge at terminals in both the
East and West Coasts of India but normalized to Krishnapatnam port on the East Coast and
Mundra port on the West Coast.
The new symbols are as follows:
CIECI00-Thermal coal CFR East Coast India 5500 kcal/kg NAR
CIWCI00-Thermal coal CFR West Coast India 5500 kcal/kg NAR
ZEMA, a market data management solution for coal industry participants, collects real-time data about
commodity prices and transforms this into sophisticated forward curve analyses. To learn more, book a
complimentary ZEMA demonstration.
New Coal Daily Dierential Assessment to Be Added to
Argus/McCloskey Coal Price Index
On September 5, 2014, Argus will introduce a new daily differential assessment in its
Argus/McCloskey Coal Price Index publication and data module. The following information
will appear in the CoalAPI module in the dcm files within the DATA\DAMCOAL folder of server
ftp.argusmedia.com.
PA Code Time Stamp Price Type Continuous
Forward
Description
PA0012924 0 49 0 Coal API 3 index
(fob Richards Bay 5500)
ICAP Energy Introduces Global Coking Coal Desk
On August 21, 2014, ICAP Energy announced that it has launched a global coking coal
desk. ICAP claimed in its related press release that coking coal derivatives have grown in
significance due to a greater need for price risk management in the highly volatile physical
coking coal industry. Physical players have migrated away from longer-term fixed price
contract terms in favor of more spot-based, index linked contracts.
ICAP Energy has also completed its first coking coal trade between a European-based bank
and an international trading company based in Singapore. The contract was cleared via CME.
ZEMA combines strengths in coal market data collection, visualization, and analysis, equipping traders and analysts to
make informed business decisions. To learn more, book a complimentary ZEMA demonstration.
The ZEMA graph in this example displays NYMEX Central Appalachian Coal Futures (CAPP)
with the Western price of Western Rail PRB after adding CAPP to the swap price. ZEMAs
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extensive data library and collection of analytic formulas help traders and brokers easily
visualize trends like the one displayed.
FIS Brokers First Trades on SGX CFR China and FOB Australia
Coking Coal Contracts
On August 4, 2014, Freight Investor Services (FIS) announced that it has executed the first
swaps on two new premium hard coking coal contracts.
The two new cleared contracts, FOB Australia and CFR China, are based on TSI assessments.
FIS brokered the first coking coal trade, which was cleared through CME on the Platts assessment.
The first trade on the China CFR trade was concluded for the September contract at
$122.5 and the first FOB trade at $118.5 for the same period. Both were brokered by FIS
between Concord Fortune and an undisclosed counterparty.
FIS noted on their site that seaborne coking coal prices have historically been based on
long-term, bilateral contract prices negotiated annually or quarterly. The move away from
long-term contract pricing and towards index-linked deals in the iron ore market has resulted
in the coking coal market following suit. This movement in the coking coal market has created
a similar opportunity to hedge price risk using cleared swaps.
ZEMAs coal market data management solution easily integrates relevant information with a wide range of CTRM and
ETRM systems. To learn more, book a complimentary ZEMA demonstration.
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Platts to Remove CFR India 5,900 GAR Prices
On September 19, 2014, Platts will discontinue its CFR India East 5,900 GAR and CFR
India West 5,900 GAR prices. Affected symbols include the following:
TCAKN00 - CFR India West 5,900 GAR
TCAKH00 - CFR India East 5,900 GAR
Platts Discontinues Monthly Coking Coal 90-Day
Forward Assessments
On August 29, 2014, Platts ceased publishing monthly coking coal 90-day forward price
assessments. These assessments were published in Coal Trader International. These
assessments have been superseded by the onset and acceptance of Plattss daily
metallurgical coal assessments.
Relevant data series remain available as market data.
To view a full list of impacted series, see the original announcement.
NYMEX Delists Australian Coking Coal Futures
On August 11, 2014, the New York Mercantile Exchange, Inc. (NYMEX) delisted the
Australian Coking Coal (Platts) futures and Australian Coking Coal (Argus) Low Vol futures
contracts as set out in the table below. These contracts were listed for trading on the
NYMEX trading floor and were available for submission for clearing on CME ClearPort. There
was no open interest in these contracts.
Relevant information has been removed from the NYMEX Rulebook.
Product Name
CME Globex Code/
Clearing Code
NYMEX Rulebook
Chapter Number
Australian Coking Coal (Platts) Futures ACL 971
Australian Coking Coal (Argus) Low Vol Futures ACR 1110
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August 2014 27
Platts Begins Publishing
Daily London Silver Price
On August 15, 2014, Platts began
publishing the daily London silver price in
dollars/troy ounce in all publications and
services under the new symbol MMAXD00.
This new dollars/oz silver price is also
available as a full weekly average from
August 22, 2014, under symbol MMAXD01.
The first full monthly average will be for
September, published September 30, 2014,
under symbol MMAXD02.
Platts will also continue to publish the
existing London Silver Fix series in cents/troy
ounce and pence/troy ounce under symbols
MMACF10 and MMACE10, respectively.
The weekly and monthly averages will also
continue to be published, including for the
week ending August 15, 2014, and month of
August. Platts is continuing to publish these
prices to ensure continuity for the data series
through this transition period.
As previously announced, effective
August 15, 2014, the Chicago Mercantile
Exchange (CME) and Thomson Reuters
began administering and publishing a daily
reference price reflecting the supply and
demand balance for silver bullion, location
London, which is now referred to as the
London Silver Price. The London Bullion
Market Association approved the new
price and the International Swaps &
Derivative Association now recognizes
the new price as an alternative to the
Silver Fix in contracts that reference
the Silver Fix.
ZEMAs data collection, validation, and storage
capabilities enable metals market participants to feed
downstream systems with real-time data about silver
and gold prices. To learn more, book a complimentary
ZEMA demonstration.
Platts Starts CIF
NWE Industrial Wood
Pellet Assessment
On August 15, 2014, Platts launched a
weekly spot market price assessment for
industrial wood pellets delivered to
Northwest Europe with a net calorific value
of 17 GJ/metric ton. The new assessment is
published in Coal Trader International,
European Power Daily, and Power in Europe.
Platts reflects the value of typical shipments
of pellets delivered to CIF Northwest Europe,
published weekly. Prices are assessed on a
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August 2014 28
market on close basis at 5 p.m. London time every Friday or, in the event of a public
holiday, on the nearest preceding business day.
Industrial I2 wood pellets with the following specifications are included in the
assessment process:
A standard calorific value of 17 GJ/mt on a net-as-received basis with typical sulfur content
of 0.1% as received and typical ash of 1% as received from any origin.
The assessment reflects the price in $/metric ton of wood pellets for delivery 7-45 days
forward from the date of publication and rolls forward each week. The new symbol is
IWPNW00 Industrial wood pellets CIF NW Europe 17 GJ/metric ton.
Effective Friday, August 15, 2014, Platts also began publishing weekly U.K. wood pellet
spreads, which are indicative prices giving the average difference between the cost of wood
pellets and the equivalent price of U.K. electricity on any given day at fuel efficiencies of 30%,
35%, and 40%.
The pellet spreads are based on CIF Northwest Europe 45-day wood pellet assessments, the
equivalent prompt U.K. power assessment, and the U.K. Levy Exemption Certificate (LEC) and
Renewable Obligation Certificate (ROC) subsidy bandings for biomass power generation.
Argus Adds New Argentine SME Upriver Price Assessments
On August 29, 2014, Argus added end-of-month averages for its Argentine SME upriver
assessment. These averages are included in the Argus Americas Biofuels publication. The
following codes will be added to the /DUSEthanol folder of the server ftp.argusmedia.com.
Continuous
Forward
Description
PA0008774 2 1 1
Biodiesel SME Argentina fob upriver
average month
PA0008774 2 2 1
Biodiesel SME Argentina fob upriver
average month
ZEMA collects over 4,000 reports from more than 400 data providersusing the solution, biofuel market participants
can easily assemble a customized data warehouse that integrates with a wide range of downstream systems. To learn
more, book a complimentary ZEMA demonstration.
Platts Discontinues NWE Non-RED SME Biodiesel Assessment
On May 30, 2015, Platts will discontinue its assessment for Northwest European SME
biodiesel holding no proof of sustainability under the EUs Renewable Energy Directive.
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This assessment corresponds with oracle
code AAUCB00; it is published in the Platts
database and on Biofuelscan. The weekly
(AAUCB03) and monthly (AAUCB04)
averages will also be discontinued.
Platts to Cease
Publishing Weekly FOB
China Tungsten Prices
On December 31, 2014, Platts will cease
publishing the weekly FOB China
ferrotungsten price (MMAHL00) and
the weekly FOB China tungsten APT
price (MMAFH00).
Spot export activity for ferrotungsten has
significantly fallen due to an export duty
of 20%, and APT trade has been impacted
as it is the main raw material for
ferrotungsten production.
Chinese domestic production has also
reduced due to government regulations
which limit export licenses, export quotas,
mining, and explorations. Preliminary market
research shows that the Chinese prices are
no longer representative in the industry.
The final values for both these prices will be
published on December 18, 2014.
Platts to Remove Daily
Kuala Lumpur Tin Price
On December 31, 2014, Platts will
discontinue its daily Kuala Lumpur tin
price (MMAAY10). This price is not a
Platts assessment, but a third party
exchange price obtained from the Kuala
Lumpur tin market.
Platts to Stop Publishing
In-Warehouse Singapore
Tin Premium
publishing the daily in-warehouse Singapore
tin premium (AASJB00). Preliminary market
research shows that this premium is no
longer representative in the industry.
With the discontinuation of the in-warehouse
Singapore tin premium, Platts will also cease
to publish the daily in-warehouse Singapore
fixed price equivalent for tin (AASJC00),
which is an automated price based on the
current LME tin price plus the assessed
tin premium.
Platts to Discontinue Daily
In-Warehouse Singapore
Lead Premium
discontinue its daily in-warehouse
Singapore lead premium (MMANG00).
Preliminary market research shows that this
premium is no longer representative in the
industry, due to a lack of market liquidity
and interest.
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August 2014 29
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With the discontinuation of the
in-warehouse Singapore lead premium,
Platts will also cease to publish the daily
in-warehouse Singapore fixed price
equivalent for lead (MMPSW00), which is an
automated price based on the current LME
lead price plus the assessed lead premium.
Should the discontinuations be finalized
after further industry consultation, the final
publication of these values will be on
December 31, 2014.
Platts to Cease Publishing
FOB China Antimony Price
publishing its weekly FOB China antimony
price (MMACZ00).
Preliminary market research shows that this
price is no longer representative in the
industry due to a lack of liquidity and
market interest. Chinese exports have also
fallen due to reduced demand, and Chinese
production has lowered significantly due to
government regulations which have limited
mining and explorations.
Should the discontinuation be finalized
publication of this price will be on
December 18, 2014.
Platts to Take Out Weekly
CIF Japan Indium Price
discontinue its weekly CIF Japan indium
price (AAVSH00) due to a lack of spot
market liquidity.
Should the discontinuation be finalized
publication of this price will be on
December 23, 2014.
Platts to Refrain from
Publishing East Asia Steel
Beam, Bar Assessments
In December 2014, Platts will
discontinue its monthly price assessment of
H-beam CFR East Asia (SB01114) and its
monthly price assessment of Merchant Bar
CFR East Asia (SB01165).
Wide product specifications, low liquidity,
and local pricing have made these pan-
regional assessments difficult to maintain as
a reflection of regional value.
Should the discontinuation be finalized after
further industry consultation, the final
publication of these price assessments will
be during the last week of December 2014.
Platts to Cease Publishing
East Asian Rebar,
Rod Assessments
In December 2014, Platts will discontinue
publication of the weekly price assessment
of Rebar CFR East Asia (symbol SB01195)
and the monthly price assessment of Wire
Rod Mesh Quality CFR East Asia (SB01245).
China has emerged as a major exporter of
rebar and wire rod to the region in recent
years. Platts is seeking to refocus its market
reporting on FOB China price assessments
for these steel products.
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Platts to Discontinue East
Asian Flat Steel Prices
In December 2014, Platts will discontinue
publication of the following price
assessments for steel flat products in the
East Asian market:
Weekly assessment of Hot Rolled Coil CFR
East Asia (symbol SB01142)
Monthly assessment of Cold Rolled Coil
CFR East Asia (SB01084)
Monthly assessment of Hot-Dip
Galvanized CFR East Asia (SB01120)
Monthly Plate A36 CFR East Asia
(SB01176)
China has emerged as a major exporter for
HRC, CRC, HDG, and plate to the region in
recent years. Platts is seeking to refocus its
market reporting on FOB China price
assessments for these products.
Platts to Halt China
Domestic Stainless
CR 201 Price
discontinue the following SBB price series:
SB01053 Stainless Steel /CR 201 2B
1-2mm/China domestic Foshan
(incl 17% vat) RMB/t monthly
Platts will remove this series due to a
lack of trading in the spot market and
limited interest in it as a market reference.
Platts to Stop China
Domestic Pig Iron
Price Assessment
discontinue its monthly China domestic pig
iron price assessment (SB01173). The
Hebei-based assessment in yuan is being
discontinued due to the lack of spot trading
of this particular product in the region.
Argus Removes Non-RED
Assessments from
Biofuels Publication
On September 30, 2014, Argus will remove
many non-RED (Renewable Energy Directive)
assessments from its Argus Biofuels
publication. Data codes will stop in the
Dbio files in the DBIOFUELS folder of server
ftp.argusmedia.com.
To view a complete list of affected
assessments, see the original announcement.
COMEX Delists ME Alcoa
Aluminum Brand
On August 20, 2014, the Commodity
Exchange, Inc. (COMEX) suspended the
registration (warranting) of the ME Alcoa
aluminum brand onto COMEX warrants for
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delivery against the Aluminum futures contract. As such, any unwarranted aluminum of ME
Alcoa brand is no longer deemed eligible.
Any registered (warranted) ME Alcoa aluminum or any ME Alcoa aluminum placed on warrant
through Wednesday, August 20, 2014 continued to be deliverable against the COMEX
Aluminum futures contract until the warrant was cancelled. Once the warrant was
cancelled, the material could not be rewarranted.
The Commodity Futures Trading Commission (CFTC) was notified of this brand
suspension and delisting during the week of August 25, 2014.
COMEX Removes E-Mini Silver Futures Contract
On August 4, 2014, COMEX delisted the e-mini silver futures contract described below.
As a result of the delisting, information regarding this contract has been deleted from related
product rule chapters; position limits in the Position Limit, Position Accountability and
Reportable Level Table located in the Interpretations and Special Notices section of
Chapter 5 (Trading Qualifications and Practices) of the COMEX Rulebook; and the CME
Globex non-reviewable ranges located in Rule 588.H of the COMEX Rulebook.
Product Name CME Globex Code/Clearing Code COMEX Rulebook Chapter Number
E-mini Silver Futures XSN/6Q 408
CME Stops 17 Livestock, Dairy, and Lumber Options
On August 4, 2014, the Chicago Mercantile Exchange (CME) delisted 17 flexible options
contracts. These contracts were listed for trading on the CME trading floor. There was no open
interest in these contracts, and respective product rules, terms, and conditions have been
removed from the exchange rulebook.
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Product Name Clearing Code CME Rules
Feeder Cattle-American style flex 8F 102A30 to 102A38
Feeder Cattle-European flex 9F 102A30 to 102A38
Feeder Cattle-Long dated flex 9F1 102A30 to 102A38
Lean Hogs-American style flex 8H 152A30 to 152A38
Lean Hogs-European style flex 9H 152A30 to 152A38
Lean Hogs-Long dated flex 9H1 152A30 to 152A38
Live Cattle-American style flex 8K 101A30 to 101A38
Live Cattle-European style flex 9K 101A30 to 101A38
Live Cattle-Long dated flex 9K1 101A30 to 101A38
Class 3 Milk-American style flex 8M 52A30 to 52A38
Class 3 Milk-American style flex 9M 52A30 to 52A38
Class 3 Milk-Long dated flex 9M1 52A30 to 52A38
Class 4 Milk-American style flex 8X 55A30 to 55A38
Class 4 Milk-European style flex 9X 55A30 to 55A38
Class 4 Milk-Long dated flex 9X1 55A30 to 55A38
Butter flex None 56A30 to 56A38
Lumber flex None 201A30 to 201A38
ZEMA can be used to transform complex CME softs data into easy-to-understand
visualizations. For example, the ZEMA graph below represents price changes for CME Oats
Future Settlements on a quarterly basis into 2016. ZEMA allows visualization of softs data in
the form of stacked bars, making prices easier to see than when they are represented via lines
and regular bars.
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Eurex Temporarily Suspends Trading in Silver Derivatives with
Codes FSFX and OSFX
On July 25, 2014, the Management Board of Eurex Deutschland and the Executive Board of
Eurex Zrich AG decided with immediate effect to suspend trading until further notice in
precious metals derivatives on silver with product codes FSFX and OSFX.
Orderly exchange trading in these precious metals derivatives appears to be temporarily at
risk, since silver price fixing after August 14, 2014 began to no longer be conducted by
London Silver Market Fixing Limited. Therefore, orderly price determination in precious metals
derivatives is endangered.
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zrich AG
will decide, when appropriate, if trading in these precious metal derivatives can be resumed.
Trading may resume if a successor organization will again conduct a silver price fixing.
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New Equity Options
Introduced on Euronext N.V.
On August 28, 2014, Euronext introduced
trading in equity options on Euronext N.V.
shares on the Amsterdam derivatives market.
The new options are listed in the spotlight
options section, Euronexts segment
dedicated to the development of new option
classes requested by market participants.
Spotlight Options give visibility to underlying
assets such as newly listed stocks, SMEs,
and/or assets with notable market events or
activity. Through a combination of liquidity
provider support and promotion by
sponsoring brokers, underlying assets are
put in the spotlight with short-term
maturities options of one, two, and
three months.
These options were listed in the Amsterdam
Spotlight options segment following the
successful IPO of Euronext N.V. on June 20.
The American-style options (ticker symbol:
ENX) expire on the third Friday of the contract
month and have initial maturities of one,
two, and three months. Each option
represents 100 shares in Euronext, and
these options are cleared via LCH.Clearnet
SA. The liquidity in the Euronext options is
supported by Susquehanna
International Securities Limited.
Finance market participants can easily align
derivatives data alongside news updates in ZEMAs
dashboard reporting tool to gain an enhanced market
perspective. To learn more, book a complimentary
ZEMA demonstration.
ISDA Publishes 2014
Credit Derivatives
Denitions Protocol
On August 21, 2014, the International
Swaps and Derivatives Association, Inc.
(ISDA) announced the launch of the ISDA
2014 Credit Derivatives Definitions Protocol.
The Protocol is part of the implementation
process for the 2014 ISDA Credit
Derivatives Definitions, which ISDA
published in February 2014. The 2014
Definitions are an updated and revised
version of the 2003 ISDA Credit Derivatives
Definitions, a document that contains the
basic terms used in the documentation of
most credit derivatives transactions.
The ISDA noted that the Protocol is designed
to enable market participants to apply the
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2014 Definitions to certain existing credit
derivative transactions, thereby eliminating
distinctions between those transactions and
new transactions entered into on the 2014
Definitions. By adhering to the Protocol,
market participants agree to amend
transactions within the scope of the Protocol
with all other adhering parties to
incorporate the 2014 Definitions into the
documentation for those transactions in
place of the 2003 Definitions.
The adherence period for the Protocol is now
open and will run until September 12, 2014.
The documentation changes set out in the
Protocol will take effect on September 22,
2014 when trading using the new Definitions
is scheduled to begin.
The Protocol is open to ISDA members and
non-members alike. The text of the Protocol
is available on the Protocol Management
section of ISDAs website.
IFC Creates $2.5 Billion
Rupee Financing
Program to Strengthen Indias
Capital Markets
On August 20, 2014, IFC, a member of the
World Bank Group, launched a $2.5 billion
rupee financing program to strengthen
capital markets and support infrastructure
development in India.
Under the program, IFC will use a combination
of rupee-denominated bonds and swaps to
raise local-currency financing of up to $2.5
billion, or INR 15,000 crore over the next five
years. Proceeds from the program will be used
for infrastructure investments in India.
Last year, IFC issued a $1 billion offshore
global bond program linked to the rupee
exchange rate. Under the program, IFC
offered six separate issuances between
November 2013 and April 2014; four
with maturities of three years, one of
five years, and the final tranche of seven
years. This set a benchmark for different
tenors in the markets and extended the
offshore rupee yield curve from less than
three years to seven.
In FY14, IFC noted that it invested
$1.2 billion in India to achieve strategic pri-
orities of providing counter-cyclical
support to infrastructure, financial inclusion,
and access to quality and affordable
healthcare to the under-served.
Keep track of developing economies using ZEMA, ZEs
data management solution for energy and commodities
market participants. ZEMAs enhanced data collection,
analytic, and integration capabilities will help you receive
up-to-date market information and easily transform it into
shareable industry analysis. To learn more, visit
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Exegy, TMX Datalinx, and
FIF Launch
MarketDataPeaks Service
in Canada
On August 18, 2014, Exegy Inc., the market
data appliance company, TMX Datalinx, the
information services division of TMX Group,
and the Financial Information Forum (FIF)
launched the first Canadian website to
track real-time market data messaging rates
at no charge for Canadian markets:
MarketDataPeaks.ca.
MarketDataPeaks.ca provides a real-time,
minute-by-minute account of the
aggregated volume of market data messages
across major Canadian exchanges. The site
highlights the peaks from the current day as
well as historic peaks. MarketDataPeaks.ca
also features the total number of
messages that occur simultaneously in any
given second across all live data feeds,
including the Toronto Stock Exchange, TSX
Venture Exchange, TMX Select, Alpha, Chi-X
Canada, Canadian Securities Exchange, and
Omega ATS. The graph displays the highest
one-second peak that occurs in each minute
and automatically updates every minute.
Historic statistics from Marketdatapeaks.ca
are captured and included in FIFs capacity
statistics as part of the organizations efforts
to address issues that impact financial
technology operations and development in
light of rapid changes occurring in
the marketplace.
ZEMA can collect data as soon as it is posted by any
source, including MarketDataPeaks.ca. To learn how
ZEMA can make your data collection, aggregation,
validation, and analysis faster and easier, visit
Deutsche Brse Creates
US Dollar Hedged Version
of HDAX
On August 19, 2014, Deutsche Brse
launched the HDAX Hedged USD Index,
which measures the performance of the
underlying HDAX while eliminating
foreign currency fluctuations. The
HDAX Index measures all 110 stocks
listed in the DAX, MDAX, and TecDAX
indices, representing more than 95% of
Germanys free-float market capitalization.
The HDAX Hedged USD Index combines the
performance of the underlying index with a
hypothetical, rolling investment into
one-month foreign exchange forward
contracts. By selling foreign exchange
forward contracts, Deutsche Brse claims
market participants are able to lock in
current exchange forward rates and manage
their currency risk. Profits and losses from
the forward contracts are offset by losses
and profits in the value of the currency.
The DAX measures the development of the
30 largest and most liquid companies on
the German equities market and represents
around 80% of the market capitalization
in Germany.
MDAX contains 50 medium-sized German
companies and foreign companies operating
primarily in Germany from traditional
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industrial sectors. These stocks are ranked directly behind the 30 DAX components
in terms of market capitalization and exchange turnover.
TecDAX includes 30 of the largest technology companies in Germany based on market
capitalization and order book turnover. All components are capped at 10%.
The HDAX Hedged USD Index is available back to December 30, 2004 with a base value
of 100.
Two New ETNs from Boost Launched on Xetra
On August 8, 2014, the following two new ETNs issued by Boost were launched on Xetra.
The new products refer to indices in the BNP Paribas Future index family and give investors
access to the inverse performance of 1-month futures contracts on German and U.S.
government bonds with a leverage factor of 3. Additional returns are generated through
interest revenue earned on the collateralized amount.
ETN Name Boost Bund 10Y 3x Short Daily ETP
Asset Class Bond
ISIN DE000A1ZLZB5
Management Fee 0.30%
Benchmark BNP Paribas Bund Future Index

The Boost Bund 10Y 3x Short Daily ETP provides a total return comprised of thrice the inverse
daily performance of the BNP Paribas Bund Future Index. The reference index comprises a
position in the Euro-Bund Future front-month contract, which tracks the yields of German
government bonds with a residual maturity of 8.5-10.5 years.
ETN Name Boost US Treasuries 10Y 3x Short Daily ETP
Asset Class Bond
ISIN DE000A1ZLZC3
Management Fee 0.30%
Benchmark BNP Paribas US Treasury Note 10y Future Index

The Boost US Treasuries 10Y 3x Short Daily ETP provides a total return comprised of three
times the inverse daily performance of the BNP Paribas US Treasury Note 10Y Future index.
The reference index comprises a position in the 10-year US Treasury Note Future front-month
contract, which tracks the yields of US government bonds with a residual maturity of
6.5 - 10 years.
ZEMA presently collects data from Deutsche Brse about derivatives products. To learn more about how ZEMA can
leverage Deutsche Brse market data, visit http://www.ze.com/the-zema-suite/.
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ICE Acquires Trading
Technology Patents
On August 7, 2014, Intercontinental
Exchange (ICE) announced that it has
acquired intellectual property rights that
relate to computerized trading strategies.
The acquired intellectual property rights
include U.S. patent numbers 7,177,833;
7,251,629; 8,498,923; 8,478,687;
8,660,940; 8,732,048; 8,725,621 and
various related pending U.S. patent
applications. Terms of the transaction were
not disclosed.
The acquired intellectual property rights
include patent claims covering the use of
an automated trading system to make price
and trading decisions based on market price
information. The intellectual property rights
cover multiple asset classes traded
electronically on exchanges, including
futures, options, and cash equities.
Finance market participants can easily align derivatives
data alongside news updates in ZEMAs dashboard
reporting tool to gain an enhanced market perspective. To
learn more, book a complimentary ZEMA demonstration.
Traiana Introduces
Enhanced Cross-Asset
Matching Engine
On August 13, 2014, Traiana launched the
next generation of its post-trade, cross-
asset allocation matching and confirmation
service for both buy- and sell-side firms.
Harmony Securities is available across
various products, including cash equities,
equity swaps, corporate and government
bonds, municipal bonds, and treasury bills;
it has been designed to meet industry
processing requirements as well as forth-
coming regulatory changes, such as
T+2 settlement.
Harmony Securities provides same-day
cross-asset trade allocation, matching
and confirmations via low latency
processing. The enhanced post-trade
matching service provides firms with
increased flexibility in matching schema
catering for all types of trading
strategies, including combinations of
cash and synthetic-equity allocations
and many-to-many matching.
ZEMA, ZEs data management solution, excels at
displaying time-series data in charts, graphs, forward
curves, and more. ZEMA also collects financial derivatives
data from a wide range of sources. For further
information, visit http://www.ze.com/the-zema-suite/.
ICAP Information Services
and MTS Add Eurozone
Index to RepoFunds Rate
On August 6, 2014, ICAP Information
Services (IIS) and MTS, a fixed income
electronic trading venue in Europe, an-
nounced that they are expanding the
RepoFunds Rate indices to include
RepoFunds Rate Euro (RFR Euro), a daily
repo index for Eurozone sovereign bonds.
The new index, RFR Euro, is derived from
eligible repo transactions that involve
sovereign bonds issued by any Eurozone
country as collateral. The index is based on
centrally cleared, electronically executed one
business day repo transactions executed
on BrokerTec, ICAPs global electronic fixed
income trading platform, and MTS. Typically,
the traded volume of eligible repo
transactions across the two trading platforms
is 230 billion per day (single counted).
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Designed as transparent and trade-backed references, the RepoFund Rate indices adhere to
the IOSCO principles for financial benchmarks. RepoFunds Rate is a series of daily euro repo
indices which reflect the effective cost of secured funding in Eurozone sovereign bond
markets. Launched in 2012, the current indices (RFR Germany, RFR France, and RFR Italy)
measure the cost of funding sovereign bonds issued by their respective countries. The
indices are published at the end of each business day.
CME Launches New Futures and Options for Delivery of
Standardized Bundle Combinations
On September 22, 2014, the Chicago Mercantile Exchange (CME) will launch several new
bundle futures and companion options for the physical delivery of standardized bundle
combinations of CME Three-Month Eurodollar (ED) futures. The initial launch of bundle futures
will include Two-Year (BU2), Three-Year (BU3), and Five-Year (BU5) contracts for physical
delivery of standardized strips of 8, 12, or 20 consecutive quarterly ED futures, respectively.
The initial launch will comprise Bundle futures for delivery in December 2014 and in
March 2015.
Each Bundle future is identified by the contract month of the nearby ED future in the
underlying deliverable grade Bundle combination. For example, the Dec2014 Two-Year
Bundle future will be for delivery of a strip of eight quarterly ED futures expiring between
Dec2014 and Sep2016, inclusive.
The last day of trading and final settlement date of an expiring Bundle futures contract will be
the Monday prior to the third Wednesday of the contract delivery month.
The initial launch will include quarterly and serial options on Bundle futures. Options typically
will terminate trading and expire at close of trading on the Friday before the third Wednesday
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of the option expiry month, similar to the expiry calendar that applies to Serial and Midcurve
options on ED futures.
These futures will be made available on CME Globex, ClearPort, and Open Outcry.
Relevant information is included below:
Name
Clearing/
Floor Code
Globex Code SPAN Code Product Size
Two-Year Bundle
Futures
BU2 BU2 BU2
Approximately $1,000,000
notional value
Three-Year Bundle
Futures
BU3 BU3 BU3
notional value
Five-Year Bundle
Futures
BU5 BU5 BU5
notional value

Manage financial market data with ease using ZEMAs data collection, validation, analytic, and visualization
functionalities. To learn more, book a complimentary ZEMA demonstration.
CME Clearing Europe Receives EMIR Authorization
On August 4, 2014, CME announced that its European clearing house, CME Clearing
Europe, has received authorization as a central counterparty clearing house (CCP) under the
European Market Infrastructure Regulation (EMIR). The authorization covers all OTC derivatives
and futures products currently cleared by CME Clearing Europe. CME Clearing Europe lists a
broad range of OTC and exchange traded derivatives, including interest rate swaps, energy
and commodities, and FX contracts for clearing. It also provides services for CME Europe, CME
Groups London-based derivatives exchange.
CME Clearing Europes CCP authorization follows the announcement that CME Groups
European clearing house is the first central counterparty (CCP) globally to offer the full
segregation client protection model with enhanced protection for all bankruptcy scenarios.
ZEMA collects over 300 financial market records. To learn more about ZEMAs vast data coverage, visit
http://www.ze.com/the-zema-solutions/data-coverage/.
Thomson Reuters Begins Elektron Direct Feed
On August 4, 2014, Thomson Reuters announced the launch of its new direct feed
service, Elektron Direct Feed, which provides customers with high-performance access to
real-time market data sourced directly from individual trading venues.
Elektron Direct Feed is a hybrid solution offering hardware acceleration to achieve low latency
and software optimization for recovery and static data mapping. Its use of configurable,
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multicast FPGA technology for real-time data
processing also means that multiple direct
feeds can be supported on a single server.
Covering U.S. cash equities initially, Elektron
Direct Feed delivers a standardized, full tick,
full depth-of-book solution. Over the course
of 2014 and 2015, Elektron Direct Feed will
supply data from U.S. futures and options
exchanges, as well as expand its coverage of
European venues.
Elektron Direct Feed uses FPGA technology
from Celoxica. This partnership brings
together data delivery expertise from
Thomson Reuters with specialist hardware
acceleration technology from Celoxica.
Thomson Reuters also offers a
consolidated feed, Elektron Real Time, which
together with Elektron Direct Feed allows it
to provide customers with real-time data in
customized formats and latencies.
Manage financial market data with ease using ZEMAs
data collection, validation, analytic, and visualization
functionalities. To learn more, book a complimentary
ZEMA demonstration.
Thomson Reuters Eikon
Expands Access to Dubai
Mercantile Exchange
On July 21, 2014, the Dubai Mercantile
Exchange (DME) announced that its
information can now be accessed through
Thomson Reuters Eikon. Thomson Reuters
Eikon is a solution for consuming real-time
and historical data that features news,
analytics, and data visualization tools.
The integration between DME and Thomson
Reuters Eikon improves the ease with
which Eikon and CME Direct clients can
research, enter, and manage trades on
DME. DME customers will receive
access to CME Directs electronic
execution capabilities alongside the tools
available in Thomson Reuters Eikon.
Thomson Reuters Eikon customers registered
to trade on DME can now access DMEs
benchmark Oman crude oil futures contracts
via the Eikon integration with CME Direct,
a front-end commodity derivatives trading
platform provided by CME Group.
To view news updates pertinent to global commodities
industries next to other data, use ZEMA, ZEs
comprehensive data management tool for financial
market participants. ZEMA enables users to easily
visualize data, news, and analytics in one screen,
ensuring that users gain a global market snapshot.
To learn more, visit http://www.ze.com/the-zema-suite/
dashboard/.
NASDAQ OMX Adds First
Trust Strategic Income ETF
On August 14, 2014, NASDAQ OMX
announced that First Trust listed a new
exchange-traded fund (ETF), entitled the First
Trust Strategic Income ETF (FDIV), on the
NASDAQ stock market.
FDIV seeks a high level of risk-adjusted
income and diversification through the use of
multiple asset classes, targeted
investment strategies, and specialized
management teams. By tactically
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August 2014 43
blending multiple investment strategies,
which includes both fixed-income
investments and income-producing equity
securities, the Fund hopes to provide a lower
risk, total return alternative to focusing solely
on one strategy.
ZEMA collects over 50 NASDAQ OMX records. To learn
more about how ZEMA can enhance your data
management processes, book a complimentary ZEMA
demonstration at http://www.ze.com/book-a-demo/.
NASDAQ OMX Lists First
Trust Enhanced Short
Maturity ETF
On August 6, 2014, the NASDAQ OMX stock
market began trading a new ETF issued by
First Trust, the First Trust Enhanced Short
Maturity ETF (FTSM).
FTSM is an actively managed ETF that seeks
to provide current income, consistent with
the preservation of capital and daily
liquidity. FTSM uses an actively managed
strategy that invests in short-duration
securities, which are primarily U.S.
dollar-denominated, investment-grade
securities. The fund is invested across a
broad range of asset classes to
maintain diversification, and at least
80% of the funds assets are
investment-grade securities.
NASDAQ OMX Introduces
Compass EMP US Discovery
500 Enhanced Volatility
Weighted Index ETF
On August 4, 2014, NASDAQ OMX
announced that Compass EMP listed a new
exchange traded fund (ETF) which began
trading on Friday, August 1, 2014. The
Compass EMP U.S. Discovery 500 Enhanced
Volatility Weighted Index (CSF) is listed on
the NASDAQ stock market.
CSF is designed to track the performance of
the CEMP U.S. Small Cap 500 Long/Cash
Volatility Weighted Index, before expenses.
The fund tracks the CEMP Smart Beta Index
and combines smart beta methodologies
with the ability to move cash in the event of
a market decline. The CEMP U.S. Small Cap
500 Long/Cash Volatility Weighted Index is
based on the daily price of the CEMP U.S.
Small Cap 500 Volatility Weighted Index.
The index represents the broad U.S. small
cap stock market and is designed to hedge
downside risk potential.
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CME Delists T-Bill Futures, Index Swap Futures and Options,
and HICP Futures
On July 28, 2014, CME delisted the following products from CME Globex, CME ClearPort,
and the CME trading floor. There is no open interest in these products.
Code Clearing/Globex Title
TB/GTB T-Bill Futures
OSP/OSS 3-Month Overnight Index Swap (OIS) Futures
OSP/OSS 3-Month Overnight Index Swap (OIS) Options
HC/HC Eurozone HICP Futures
CME Removes Four Interest Rate Contracts
On July 28, 2014, CME delisted four interest rate contracts. These contracts were listed
for trading on the CME trading floor and CME Globex; they were available for submission for
clearing through CME ClearPort. There was no open interest in these contracts.
The respective product rule chapters and terms and conditions contained in the Position
Limit, Position Accountability and Reportable Level Table located in the Interpretations and
Special Notices section of Chapter 5 (Trading Qualifications and Practices) of the CME
Rulebook were removed from the Exchange Rulebook.
Product Name Chapter Clearing Code
13-Week U.S. Treasury Bill Futures 451 T1
Eurozone Harmonized Index of Consumer Prices (HICP) Futures 414 HC
Three-Month Overnight Index Swap Futures 460 OSP
Options on Three-Month Overnight Index Swap Futures 460A OSP
HKFE Announces Revised Margins for CITIC Pacic
and HKEx Futures
On August 4, 2014, Hong Kong Futures Exchange Limited (HKFE), a wholly-owned
subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), modified the minimum
margins to be collected by an exchange participant from its clients for the futures listed below.
The adjustments are based on the clearing companys normal procedures and standard
margining methodology.
To view the current margins, refer to HKExs website. HKFE noted that the rates set out below
are minimum rates; exchange participants should set their margin requirements according to
clients individual circumstances.
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Futures Contract Margin Rate Initial Margin (HK$) Maintenance Margin (HK$)
CITIC Pacic Limited Full Rate 1,010/lot 806/lot
Spread Rate 303/spread 242/spread
Hong Kong Exchanges
and Clearing Limited
Full Rate 1,120/lot 895/lot
Spread Rate 336/spread 269/spread
ICE Benchmark Administration Completes ISDAFIX Transition
On August 4, 2014, ICE announced that ICE Benchmark Administration (IBA) has
formally taken over the role of administrator of the ISDAFIX benchmark from the International
Swaps and Derivatives Association (ISDA).
IBA was appointed the new administrator in April, and formally commenced its role as the
administrator on Friday, August 1, 2014. The ISDAFIX benchmark represents the average
mid-market swap rate for four major currencies: the euro (EUR), British pound (GBP), Swiss
franc (CHF), and U.S. dollar (USD) at selected maturities on a daily basis. Market participants
use the rate to price and settle swap contracts and as a reference rate for floating rate bonds.
The initial IBA calculation methodology continues the polled submission model, where
contributing banks submit mid-point prices to the administrator. The assumption of
administration by IBA is the first step towards migrating to a new market-based methodology
of tradable quotes. This move will be made possible by the introduction of electronic markets
for interest rate swaps and is designed to align the ISDAFIX benchmark with the principles for
financial benchmarks published by the International Organization of Securities Commissions
(IOSCO) in 2013.
Following the transition of the ISDAFIX benchmark, IBA is responsible for the following:
Governance of all administrative processes including oversight and decisions of
methodology, systems and controls relating to the benchmark
Daily operations, including collection of input data and calculation of the benchmark rates
Ex-ante and ex-post checks on submissions to ensure the integrity of the benchmark.
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August 2014 46
Deutsche Brse and Philippine Stock Exchange Sign MOU
On August 4, 2014, Duetsche Brse and the Philippine Stock Exchange, Inc. (PSE)
signed a memorandum of understanding (MOU) to establish market data cooperation.
Some key areas on which the exchanges would like to collaborate include the licensing of
current market data offerings, the increase of distribution channels for real-time data, and
new product design and innovation. Deutsche Brse and the Philippine Stock Exchange
expect to develop a concrete plan by the end of Q3 2014.
Deutsche Brses new relationship with the PSE is the latest in a series of market data
partnerships with exchanges in the Asia region over the last year. In April 2014,
Deutsche Brse and Shanghai Stock Exchange (SSE) announced a partnership under which
SSE assumed responsibility for the real-time distribution, marketing, and sales of key
Deutsche Brse market data products in mainland China. In October 2013, Deutsche Brse
became the exclusive licensor of Bombay Stock Exchanges market data and information
products to all international clients.
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AccuWeather Updates Windows Phone App to Include
MinuteCast for Global Locations
On August 20, 2014, AccuWeather announced it has launched a new version of its Weather
for Life app designed for Windows Phone users. The app has several new AccuWeather
features, such as MinuteCast, a minute-by-minute precipitation forecast for a persons exact
street address or GPS location. AccuWeathers Windows Phone app is the first of its mobile
apps to expand MinuteCast for more locations, including Japan, Ireland, United Kingdom,
Canada, and the contiguous United States.
AccuWeather MinuteCast includes precipitation type and intensity as well as start and end
times for precipitation. It gives users by-the-minute precipitation forecasts for the next two
hours, set for their exact location. The MinuteCast is supported by both location-based and
MinuteCast-patented technology.
In addition to MinuteCast, AccuWeather for Windows Phone provides severe weather alerts
with automatic, push notifications in the United States, Canada, United Kingdom, and
Germany, and severe weather notices for all other locations. The app also offers current
conditions data, hourly forecasts for the next 72 hours, 15-day extended forecasts, and Live
Tiles in three sizes for multiple locations that automatically update the forecasts on the
Start screen.
The ZEMA graph in this example displays the average temperature forecast for New York,
Sacramento, and Chicago in degrees Celsius from July 28 until August 28. The data is taken
from AccuWeathers RealFeel weather reports and is represented in ZEMAs Market Analyzer
application. This visualization is in the form of lines with points to specify significant points of
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August 2014 48
change in temperature. ZEMA enables users to choose from a diverse array of visualization
methods when representing AccuWeather data.
EIA Mapping Tool Shows US Energy Facilities in Areas at
Risk of Flooding
On August 6, 2014, the U.S. Energy Information Administration (EIA) announced a new online
tool that will help the public learn about energy facilities exposure to flooding caused by
hurricanes, overflowing rivers, flash floods, and other wet-weather events. The Flood
Vulnerability Assessment Map shows which power plants, oil refineries, crude oil rail
terminals, and other critical energy infrastructure are in areas vulnerable to coastal and
inland flooding.
The mapping tool combines EIAs existing U.S. Energy Mapping System with flood hazard
information from the Federal Emergency Management Agency (FEMA). To determine if a
specific area is vulnerable to flooding, users can type an address, town, or county name in the
find address box on the mapping system or can zoom in on areas of the United States
highlighted with flood hazard information.
The Flood Vulnerability Assessment Map is available at:
http://www.eia.gov/special/floodhazard/
ZEMAs dashboard reporting tool helps commodity market participants align real-time weather data next to maps, news
updates, and more to gain a better perspective of the complex relationship between environmental changes and industry
products. To learn more, book a complimentary ZEMA demonstration.
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NYMEX Introduces Capesize 2014 Timecharter Average
(Baltic) Futures
On August 25, 2014, the New York Mercantile Exchange, Inc. (NYMEX) listed the following dry
bulk freight futures contract:
Contract Code Rule Chapter
Capesize 2014 Timecharter Average (Baltic) Futures Contract CF2 769
The Capesize 2014 Timecharter Average (Baltic) Futures contract will be listed for trading
on CME Globex and the NYMEX trading floor; it will be available for submission for clearing
through CME ClearPort.
Block trades are permitted for this contract, with a minimum transaction size of 5 lots,
consistent with similar freight futures contracts.
ZEMA is an ideal solution for traders and analysts in the freight industry, as the softwares data visualization and
dashboard reporting functionalities help users gain an enhanced market-wide perspective. To learn more, book a
complimentary ZEMA demonstration.
Baltic Exchange and Chinas Xinhua News Agency Release
Shipping Center Index
On August 21, 2014, the Baltic Exchange and Chinas Xinhua news agency announced the
release of a report and index that assesses the importance of the worlds key shipping centers.
The index covers 46 of the worlds largest ports and cities and is designed to bring clarity to
the investors and governments regarding the relative performance of shipping centers around
the world.
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Singapore tops the list; London is in second place, closely followed by Hong Kong. All three
cities have large port facilities and support comprehensive maritime business service sectors.
Of the top ten global shipping centers assessed, five were in Asia, three in Europe, one in the
Middle East, and one in the U.S.
The index is based on evaluations of the following criteria:
Maritime services: brokerage, arbitration, ship management, maritime insurance,
ship engineering, and ship repairs
Business environment: economic freedom, tariffs, logistics efficiency and
developed infrastructure, official corruption/transparency, national IT, and
communications development
Port facilities: container and commodity cargo volume, port depth, container berths, and
number of quay cranes
The results are based on data from the following sources:
The Baltic Exchange
Drewry Shipping Consultants
The Heritage Foundation
International Association of Classification Societies (IACS)
International Transparency Organization
International Union of Marine Insurance
Lloyds List
London Maritime Arbitrators Assoc. (LMAA) & The Society of Maritime Arbitrators
United Nations Conference on Trade and Development
United Nations E-Government Development Database
The Wall Street Journal and The Heritage Foundation, 2013 Index of Economic Freedom
The World Bank
Xinhua Index Co.
The ISCD Index formula converts data values on a scale weighted by relative importance to
long-term center prosperity.
Market participants can use ZEMA to receive up-to-the-minute data regarding global freight markets. To receive a free
ZEMA demonstration, visit http://www.ze.com/book-a-demo/.
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August 2014 51
Platts to Cease Publishing NWE Oxo-Alcohols Assessments
On January 2, 2015, Platts will discontinue all oxo-alcohol assessments in Europe
due to a shift in market dynamics. These assessments are presently located in Platts
Petrochemical Alert.
The following assessments will be discontinued:
Assessment Code Monthly Average
N-Butanol FOB Rdam PHAPE00 PHAPF03
I-Butanol FOB Rdam PHAPI00 PHAPJ03
2-EH FOB Rdam PHAPM00 PHAPN03
DOP FOB Rdam PHAPQ00 PHAPR03
PA FL FOB Rdam PHAPU00 PHAPV03
N-Butanol FD NWE HPAPG00 HPAPH03
I-Butanol FD NWE HPAPK00 HPAPL03
2-EH FD NWE HPAPO00 HPAPP03
DOP FD NWE HPAPS00 HPAPT03
PA ML FD NWE HPAPY00 HPAPZ03
PA FL FD NWE HPAPW00 HPAPX03
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ZEMA Updated to Collect New
CAISO Data Reports
For over 15 years, ZE has consistently kept
up to date on the latest in energy and
commodity data changes. ZE collects data
from vendors spanning the weather, oil,
natural gas, electricity, agriculture, and
finance industries, including Platts, Argus,
CME/NYMEX, ICE, and OPEC. ZE then
provides its clients with access to both
public (free subscription) and private
data reports.
ZE not only provides its clients with reports
collected from a wide range of data
vendors, but helps them avoid potential
collection gaps that may arise when data
reports change in response to industry
trends. ZE monitors all markets and updates
ZEMA data parsers in the event of change to
minimize information loss. Parsers are
modified when reports from data vendors
alter, report names or services are updated,
and more. ZEMA clients can rest assured
that their data is clean, accurate, and timely.
This month, ZE has gained new access to a
handful of California ISO (CAISO) data feeds
that will be released this fall. ZE took the
initiative to acquire access to these reports
in advance of CAISOs upcoming October
1, 2014 web service changes. The changes
cover the following CAISO systems: Open
Access Same-Time Information System
(OASIS), Automated Dispatch System (ADS),
CAISO Market Results Interface (CMRI),
Scheduling Infrastructure and Business
Rules (SIBR), and Outage Management
System (OMS).
A handful of the new CAISO reports ZE will
collect include:
1. PRC_EIM_GHG EIM GHG
shadow price
GHG shadow price of the net imbal-
ance energy export.
2. ENE_EIM_TRANSFER_LIMITS
EIM Transfer limits
EIM transfer limitsafter each RTPD and
RTD market run is completed, OASIS will
post the NSI low/high limits per each EIM
BAA group that is used in the market.
3. ENE_EIM_TRANSFER EIM Transfer
EIM BAA Net Imbalance Energy Export
(transfer) will be posted to OASIS for every
RTD and RTPD market.
4. ENE_EIM_DYN_NSI EIM
BAA Dynamic NSI
Dynamic Net Schedule Interchange for
each BAA will be posted to OASIS for
every RTD and RTPD market.
5. ENE_BASE_NSI BAA Base NSI
DAM and RTM hourly base NSI for each
EIM BAA. All data shall be from the latest
DAM and the first RTPD 15-minute market
within the hour.
6. CAISO_ADS_INSTRUCTION
Instructions for CAISOs Automated
Dispatch System.
7. OMS_TransmissionOutageResults
These reports are important for those looking
to keep up to date on CAISO emissions data
(1), the CAISO Energy Imbalance Market
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(2,3), and those monitoring BAA
transmission control (4, 5). Other upcoming
reports ZE will collect from include SIBR,
CMRI, and MRTU (Market Redesign and
Technology Upgrade).
CAISO will also be replacing its existing
outage management system (OMS). It will
replace it with a new one with enhanced
modeling capabilities and more accurate
methods of managing outages. The system
is expected to be implemented in October
2014, at which time the Scheduling and
Logging for CAISO (SLIC) application will no
longer be used for managing outages. For
more detailed information about the new
OMS, see the following link.
CAISO has continued to run its ISO
External Market Simulation Plan, which
involves providing participants with an
opportunity to test their systems and proce-
dures in advance of market implementation.
This facilitates an effective dress rehearsal
and helps expedite a smooth production
launch. The simulations of fall release 2014
initiatives began on July 30, 2014 and will
end on September 12, 2014. The release of
the actual initiatives will be activated in the
production environment on October 1, 2014.
More information is available here.
For further detailed information on
news about CAISO data reports, see the
following links:
Interface Specification for OASIS
ADS API Specification
CAISO Market Results Interface (CMRI)
SIBR Interface Specifications
ISO Interface Specification (OMS)
ZE has been voted Data Management
House of the Year in the annual Energy Risk
software survey for five years in a row
(2009-2013). Fortune 500 companies have
relied on the ZEMA solution to provide the
data analysis they need.
For more information on ZEs data
coverage, see here.
For more information on ZEMA or to
book a complimentary demo,
click here.
ZE and Interactive Data Develop
Integrated ZEMA and Future
Source Solution
In May 2014, ZE and Interactive Data an-
nounced a new alliance that has resulted in
the integration of ZEMAs commodity and en-
ergy content into the FutureSource platform.
This integration enables FutureSource clients
to access ZEMAs valuable data, including
real-time, exchange, third party, and
proprietary content, within the FutureSource
market data platform. The combined ZEMA
and FutureSource solution delivers a series of
functions that allow new and powerful ways
to view and analyze data. Users can navigate
to and view their chosen content sets within
FutureSources quotes and grid analytics
window, chart and analyze historical content
sets, display powerful forward curve analysis,
and easily export information to Excel for
additional data analysis.
New Data Reports from ZEMA
At ZE, we are continuously working to expand
our data coverage, as we provide our clients
with data essential to their operations. Our
highly flexible data parsers can collect
information in any electronic format, from
any source, and at a frequency clients need.
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ZE has added several new data reports to ZEMA following the publication of our July issue of
ZE DataWatch:
Data Source Report Commodity Subscription
AEMO Actual Effective Degree Day Others No
AESO Short Term Wind Forecast Electricity No
Bloomberg Dow Jones UBSCI (CCR) Price Yes
CAISO CMRI Market Schedules HASP Electricity Yes
CAISO CMRI Schedule Prices RTD Electricity Yes
CAISO MRTU ENGY - Base NSI (DAM) DA Snapshot Electricity No
CAISO MRTU ENGY - Base NSI (RTM) T40 Snapshot Electricity No
CAISO MRTU ENGY - Base NSI (RTM) T55 Snapshot Electricity No
CAISO MRTU ENGY - EIM BAA Dynamic NSI (RTD) Electricity No
CAISO MRTU ENGY - EIM BAA Dynamic NSI (RTPD) Electricity No
CAISO MRTU ENGY - EIM Transfer (RTD) Electricity No
CAISO MRTU ENGY - EIM Transfer (RTPD) Electricity No
CAISO MRTU ENGY - EIM Transfer Limits (RTD) Electricity No
CAISO MRTU ENGY - EIM Transfer Limits (RTPD) Electricity No
CAISO MRTU PRC - EIM GHG Shadow Prices (RTPD) Electricity No
DECC
Deliveries of Petroleum Products
for Inland Consumption
Oil No
DGEG Monthly Fuel Sales in Portugal Fuel No
Federal Reserve Bank
of New York
Federal Funds Rate Others Yes
Galileo Daily Weather Weather Yes
GFI European Natural Gas Closing Price Gas Yes
GME Gas Balancing Platform G+1 Segment Gas No
ICAP Closing Run - Futures Energy Yes
ICAP Closing Run - Spot Energy Yes
ICAP European Natural Gas Closing Prices Energy Yes
IIR PowerCast Outages Electricity Yes
LCH.Clearnet OTC IRS Volume and Notional Outstanding Totals Price No
LCH.Clearnet OTC IRS Volumes by Product Price No
Markedskraft CHP Hourly Actual Electricity Yes
Markedskraft Coal Freight Price Forecast Perret Quarterly Coal Yes
Markedskraft Coal Freight Price Forecast Perret Yearly Coal Yes
Markedskraft Coal Freight Spot Price Perret Electricity Yes
Markedskraft Coal Replacement Cost Perret Others Yes
Markedskraft EEX Actual Capacity Germany Electricity Yes
Markedskraft EEX Capacity Forecast Germany Electricity Yes
Markedskraft Freight Price Forward Perret Quarterly Freight Yes
Markedskraft Freight Price Forward Perret Yearly Freight Yes
MCRM Daily Energy Report Futures Yes
MeteoSwiss Daily Weather Weather Yes
NBP Exchange Rate - Table A - Average Currency No
NBP
Exchange Rate - Table B - Average -
Inconvertible Currencies
Currency No
NBP Exchange Rate - Table C - Bid/Ask Currency No
PJM MSRS - RPM Auction Charges Electricity Yes
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PJM MSRS - RPM Auction Credits Electricity Yes
PJM MSRS - Zonal Aggregate Definitions Electricity Yes
RIM Intelligence Crude Intelligence Daily - Futures Oil Yes
RIM Intelligence Crude Intelligence Daily - Spot Oil Yes
RIM Intelligence Product Intelligence Daily - Futures Others Yes
RIM Intelligence Product Intelligence Daily - Spot Others Yes
Speedwell Weather Daily Weather Weather Yes
Speedwell Weather Hourly Weather Weather Yes
Standard & Poors GSCI Preliminary Closing Index Levels Others Yes
Vigicrues River Flow Water No
WSI ISO Region Weighted Forecasts - Daily Weather Yes
WSI ISO Region Weighted Forecasts - Period Weather Yes
WSI
Monthly Average and
Record Min/Max & CDD/HDD Report
Weather Yes
PEGAS: Trading Results in July
Leipzig, Paris, August 4, 2014: PEGAS, the natural gas platform jointly established by the
European Energy Exchange (EEX) and Powernext, announced that a total volume of
45.8 TWh was traded in July 2014 compared with 14.8 TWh traded in the same period
of the previous year.
Spot Markets
Overall trading volumes on the Spot Markets amounted to 20.5 TWh in July, whichconstituted
more than twice the volume traded in July 2013 (9.8 TWh). The German spot markets
(market areas GASPOOL and NCG) recorded a volume of 7.2 TWh (July 2013: 2.7 TWh),
whereby 1.1 TWh have been traded in quality-specific gas products. The French spot
markets (market areas PEG Nord, PEG Sud, PEG TIGF) registered a total of 7.3 TWh
(July 2013: 6.2 TWh). The volume traded on the Dutch TTF spot market amounted to 5.9 TWh
traded in July (July 2013: 1.0 TWh). The Belgian ZTP spot market, launched on 9 July 2014,
recorded 88,104 MWh for its first month of trading.
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Derivatives Markets
In July, trading volumes on the PEGAS Derivatives Markets increased to 25.3 TWh. This is
more than 5-times the volume traded in the same periodin 2013 (5.0 TWh). The volume on
the German Futures markets (GASPOOL and NCG market areas) reached 6.6 TWh (July 2013:
1.9 TWh). In the French market areas, a total of 3.7 TWh was traded on PEG Nord and
PEG Sud Futures (July 2013: 2.3 TWh). The Dutch TTF Futures market registered a total
volume of 15.0 TWh traded in July (July 2013: 0.7 TWh). Furthermore, a volume of 7,440
MWh was registered in the new ZTP Futures market.
Details on the natural gas volumes and prices are available in the enclosed monthly
report and below.
PEGAS Monthly Figures Report for July 2014
Volumes
Spot Market Derivatives Market
July 2014 in MWh Jul 2014 in MWh
GASPOOL 2,710,318 1,618,148
NCG 4,503,140 4,944,138
PEG Nord 5,032,700 3,598,440
PEG Sud 2,177,234 149,420
PEG TIGF 53,990 n/a
TTF 5,911,172 14,971,530
ZTP 88,104 7,440
Total 20,476,658 25,289,116
Indices
Spot Market Index Name
Jul 2014 Index Value
(min./max. in EUR/MWh)
GASPOOL EEX Daily Reference Price 15.175 / 18.371
NCG EEX Daily Reference Price 15.340 / 18.498
PEG Nord
Powernext Gas Spot DAP
Powernext Gas Spot EOD
15.42 / 18.40
15.68 / 18.48
PEG Sud
Powernext Gas Spot DAP
Powernext Gas Spot EOD
19.78 / 23.51
19.60 / 23.61
TTF EEX Daily Reference Price 15.057 / 18.211
Derivatives Market Index Name
Aug 2014 Index Value
(in EUR/MWh)
Germany
EGIX (European Gas Index)
Monthly Average
16.691
GASPOOL EGIX Monthly Average 16.556
NCG EGIX Monthly Average 16.831
PEG Nord
Powernext Gas
Futures Monthly Index
17.29
PEG Sud
Powernext Gas
21.97
TTF
Powernext Gas
16.56
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PEGAS to Launch Spot
Contracts for NBP
Leipzig, Paris, July 30, 2014: PEGAS, the
joint natural gas platform of EEX and
Powernext, will further expand its product
portfolio with Spot Market contracts for the
British National Balancing Point (NBP). The
new product is scheduled to be launched on
15 October 2014.
The offering for the NBP hub comprises
physically fulfilled contracts for Within-Day,
Day-Ahead, Weekend, Saturday, Sunday
and Individual Days which will be tradable
on Trayport ETS(SM). The payment process
for the trades already takes place on the
following business day. Trading of the new
NBP product will be available 24/7.
The extension of our gas offering to the
British market area is an important step to
further develop PEGAS towards a truly Pan
European gas platform, says Jean-Franois
Conil-Lacoste, Chief Executive Officer of
Powernext. Peter Reitz , Chief Executive
Officer of EEX, adds: PEGAS has become
the clear leader with regards to liquidity in
exchange traded spot gas contracts in
continental Europe. Our ambition is to
extend this level of liquidity to the NBP spot
market as well.
Clearing and settlement of all transactions
will be executed by European Commodity
Clearing (ECC) which conducts the
nomination of the trades on behalf of the
participant and ensures a straight-forward
financial settlement.
For trading of the new products, participants
will be exempt from fees for six months,
starting on 15 October. This includes trading
fees as well as clearing and delivery fees.
Furthermore, new members on PEGAS
do not have to pay the annual member-
ship fee for the first year of trading.
This announcement follows the
successful launch of Spot and Futures
contracts for the Belgian Zeebrugge
Trading Point (ZTP) and the
introduction of 24/7 opening hours on the
French PEG Spot Markets. Since 9 July, spot
contracts for Within-Day, Day-Ahead,
Weekend, Saturday, Sunday and
Individual Days as well as spreads between
ZTP and NCG, TTF, GASPOOL and PEG-Nord
are tradable. At a later stage, PEGAS will
launch Spot contracts for the Belgian hub
Zeebrugge Beach (ZEE) as well as the
associated location spread between ZEE
and NBP.
In the first half of 2014, a volume of
248.4 TWh was traded on the PEGAS
markets which is more than the total volume
reached in 2013 (222.6 TWh).
About PEGAS
Pan-European Gas Cooperation:
PEGAS is a cooperation between the
European Energy Exchange (EEX) and
Powernext. In the framework of this
cooperation, both companies combine their
natural gas market activities to create a
pan-European gas offering. Members benefit
from one common Trayport gas trading
platform with access to all spot and
derivatives market products offered by the
two exchanges for the German, French,
Dutch and Belgian market areas.
Furthermore, spread products between these
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market areas are tradable on the same trading platform. For more information:
www.pegas-trading.com
About EEX:
The European Energy Exchange (EEX) is the leading European energy exchange. It
develops, operates and connects secure, liquid and transparent markets for energy and
related products on which power, natural gas, CO2 emission allowances, coal and guarantees
of origin are traded. In the context of its majority shareholding in Cleartrade Exchange
(CLTX), EEX additionally offers the markets for freight, iron ore, fuel oil and fertilizer.
Clearing and settlement of all trading transactions are provided by the clearing house
European Commodity Clearing AG (ECC). EEX is a member of Eurex Group. For more
information: www.eex.com
About Powernext:
Powernext SA manages complementary, transparent and anonymous energy markets.
Powernext Gas Spot and Powernext Gas Futures were launched on 26 November 2008 in
order to hedge volume and price risks for natural gas in France, the Netherlands and Belgium.
Powernext manages the National Registry for electricity guarantees of origin in France since
1 May 2013. Powernext owns 50 % in EPEX SPOT and 20 % in EEX Power Derivatives. For
more information: www.powernext.com.
EPEXSPOT: French Day-Ahead Awakens
Paris, Leipzig, Bern, Vienna, August 1, 2014: In July 2014, a total volume of 30.9 TWh was
traded on EPEX SPOTs Day-Ahead and Intraday markets (July 2013: 29.8 TWh). The volume
on the French Day-Ahead market marked a new record with 5,959,611 MWh of traded
volume. This is a 5% increase from the previous record in February 2013 (5,673,213 MWh).
The upsurge is due to several factors, such as an increase in hydro (+2%) and nuclear power
production (+%9) compared to July 2013. At the same time, the usual weak demand in July
was lower (-3%) compared to one year earlier. As a result, France exported significantly more
electricity (+39% compared to July 2013).
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Day-Ahead Markets
In July 2014, power trading on the Day-Ahead auctions on EPEX SPOT accounted for a total of
28,339,396 MWh (July 2013: 27,759,196 MWh) and can be broken down as follows:
Areas
Monthly volume
MWh
Monthly volume
previous year MWh
Price monthly average
(Base / Peak*) Euro/MWh
DE/AT 20,704,044 21,503,648 31.88 / 36.82
FR 5,959,612 4,363,712 25.49 / 33.26
CH 1,675,740 1,891,836 31.43 / 36.68
ELIX European
Electricity Index
28.26 / 35.08
* Peak excl. weekend
Prices within the German and the French market, both coupled within the Multi-Regional
Coupling, converged 35% of the time.
Intraday Markets
On the EPEX SPOT Intraday markets, a total volume of 2,515,395 MWh was traded in
July 2014 (July 2013: 2,020,511 MWh).
Areas
Monthly volume
MWh
Monthly volume previous year
MWh
DE/AT 2,237,815 1,707,267
FR 169,825 230,091
CH 107,755 83,153

In July, cross-border trades represented 17.1% of the total intraday volume. The volume in
15-minute contracts on the German and Swiss Intraday markets reached another all-time
high and climbed to 475,655 MWh. It is a 6% increase from the previous record in June 2014
(449,494 MWh). In June, they represented 20.7% more than one fifth of the volume
traded on the German and Swiss Intraday markets.
One year, one terawatt hour: During the first 365 days after the launch of the Swiss Intraday
market on 26 June 2013, 976,241 MWh have been traded, which corresponds to 5% of the
total Swiss volumes traded on the spot Exchange. 86.8% of all transactions were concluded
across borders. This is a peak value which illustrates well the economic advantages of
European power market integration. With the start of the Swiss Intraday market, 15-minute
contracts were also launched in Switzerland, with the possibility to trade across borders with
the German 15-minute market. With a yearly traded volume of 44,145 MWh or a share of
4.5% of the total Intraday volume, 15-minute contracts have made a precious contribution to
the short-term intra-hour adjustment of supply and demand. Furthermore, the Swiss Intraday
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saw a new record volume in July. The Swiss
Intraday market is a real success story and
joins the ranks of the most liquid European
Intraday markets.
About the European Power Exchange EPEX
SPOT SE:
EPEX SPOT SE operates the power spot
markets for Germany, France, Austria and
Switzerland (Day-Ahead and Intraday).
Together these countries account for more
than one third of the European power
consumption. EPEX SPOT also acts as
market operating service provider for the
Hungarian Power Exchange HUPX and
operates the coupling between the Czech,
the Slovakian, the Hungarian and soon the
Romanian markets on behalf of the local
Exchanges. It is a European company
(Societas Europaea) based in Paris with
branches in Leipzig, Bern and Vienna. Over
220 companies from Europe are active on
EPEX SPOT. 217 TWh were traded on EPEX
SPOTs power markets in the first seven
months of 2014.
Asia-Pacic Condensate
Market Transformation Prompts
New Argus Index
New flows of lightly distilled US condensate
exports to the expanding Asia-Pacific market
for petrochemical feedstocks highlight the
need for more transparent price identifica-
tion for condensates in the region.
The Argus Condensate Index (ACI), launched
by energy price reporting agency Argus this
month, is a key indicator of value for
participants in the emerging market to
supply petrochemical feedstocks from the
US and other producers to Asia-Pacific.
The first tankers carrying US lightly
distilled condensate have been booked to
take cargoes from the Gulf coast to
Japan and South Korea, following US
commerce department authorization
of exports by US firms Pioneer and
Enterprise from the Eagle Ford shale
formation in Texas. The move clarifies the
terms of a 40-year old ban on virtually all US
crude and condensate exports. At the same
time, new splitters in South Korea, Singapore
and China are boosting Asia-Pacific demand
for condensates this year.
The ACI will bring transparency to a market
affected by diverse price signals, including
the relative value of crude and naphtha. The
daily ACI reflects the lowest delivered price
in southeast Asia of the two most traded
condensate grades in the region Qatari
Deodorized Field Condensate (DFC) and
Australian North West Shelf (NWS). Qatar
exports 22 cargoes of DFC a month, mostly
to Asia-Pacific, and Australia markets five
cargoes of NWS condensate each month.
Argus Media chairman and chief executive
Adrian Binks said: Argus works with the
industry to develop the price assessments
needed for transparency. The ACI will help
market participants understand value and
realize opportunity.
The ACI is published in the daily Argus Crude
market report and through Argus Direct, an
advanced online platform.
Notes to Editors:
Condensate is formed when pressurized field
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petroleum condenses from gas into light
liquids on coming to the surface, where the
temperature and pressure are lower.
Distilling it helps stabilize the condensate,
and the commerce department has now
made clear that this process makes it
eligible for US export. Condensate can be
refined in the same way as crude, but
splitters are often a more appropriate way of
obtaining higher-value products and
petrochemicals from the feedstock.
US condensate output has doubled to 1mn b/d
in five years. But splitters to process the rising
production have yet to be built in the US, while
condensate splitter capacity in Asia-Pacific will
reach 1.1mn b/d by the end of this year from
about 665,000 b/d a year earlier. Asia-Pacifics
newly added processing capacity can handle a
range of condensate with varying sulphur
content from Asia, west Africa, the Mediterranean
and now the US. And regional refineries process
condensates in crude distillation units (CDUs)
when they calculate that margins from processing
the feedstock are better than for light crude.
The bulk of the increase in Asia-Pacific
condensate splitter capacity is related to the
start-up of four projects Jurong
Aromatics (100,000 b/d) in Singapore, SK
Energy (120,000-140,000 b/d) and
Samsung Total (140,000 b/d) in South
Korea, and Chinas Tenglong unit, which
originally came on stream in 2013 but has
been boosting runs this year.
Distillation uses heat to separate a liquid into
distinct components, and is associated with
almost every downstream process, especially
CDUs in refineries.
Light distillation is used in a stabilizer, where
a small, simple fractionator removes the
most volatile elements in crude and
condensate output in the field.
A condensate splitter is a simple
fractionator that can separate liquids
into fewer components than a modern
refinerys CDU, but more components than a
stabilizer used in light distillation.
Splitters separate the lightest
components in condensates
including ethane, propane and the
C5+ group, which comprises naphtha
and natural gasoline.
Media Contacts: Singapore
Jim Nicholson
+65 6496 9960
mediasg@argusmedia.com
OTC Global Holdings Adds
Forwards for Crude Oil
OTC Global Holdings LP (OTCGH) is
excited to leverage its share in crude oil
trading and announce the addition of its
new market data service, Crude Oil Forward
Curves. OTCGHs liquidity in the crude oil
space has allowed the Market Data team to
be able to produce a forward curve product
that will give end users a high quality and
affordable option. The forwards will be
available in easy to use .CSV and .XLS files;
in addition we are working now with our
partner companies to make sure this data is
available through their systems as well.
Sample Crude Oil Forward Curve Report
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Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX)
On the New York Mercantile Exchange (NYMEX), crude oil prices for NYMEX prompt-month
contracts for Brent and Western Texas Intermediate (WTI) dropped for the second month in a
row. By the end of the fourth Friday of August 2014, the prices of Brent and WTI dropped by
4% and 5%, respectively. When compared to the previous month, in August 2014
prompt-month contracts for Brent slid to $104 USD/Bbl, whereas the prompt-month contract
for WTI sank to $97 USD/Bbl. In August 2014, data from NYMEX future settlements showed
that Brent reached the lowest price levels in the past 12 months$6 USD/Bbl below the
August 2013 average price. The past 12-month averages for Brent and WTI on NYMEX are
$109 USD/Bbl and $101 USD/Bbl, respectively.
The slightly larger drop in the European benchmark caused the Brent-WTI spread
(represented by the purple area in the graph above) to hit $7 USD/Bbl. Also, the Brent-WTI
spread has been $8 USD/Bbl on average over the past year.
The U.S. is currently at the center of attention as the market heads into maintenance season,
during which time market participants will be aiming to reduce risk exposure. On the other
hand, geopolitical tensions in the Middle East have continued, including U.S. air strikes in Iraq
and the possibility of air strikes against Syria. Some strikes are in retaliation to the Islamic
State terrorists who recently beheaded an American journalist in the region. Despite this, the
global crude market tumbled in August 2014 as supply surged and demand declined.
The end of driving season in the summer and the encroaching refinery maintenance season
weakened demand at a time when Libya and Iraq have swollen global supplies.
1
The increase
in crude supply from Libya (612,000 barrels a day) and Iraq (300,000 barrels a day) came as
the EIA forecasted U.S. production will reach 9.28 million barrels per day next year, the
highest annual average since 1972.
2
The decline of global crude benchmarks may be
attributed to strong supplies and tepid demand.
1 Crude Bets Tumble as Global Supply Surges, Financial Post, August 25, 2014, accessed August 25, 2014,
http://business.financialpost.com/2014/08/25/crude-bets-tumble-as-global-supply-surges/.
2 Ibid.
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Crude Oil Brent vs. WTI: Forward Curve (NYMEX)
On the New York Mercantile Exchange (NYMEX), forward curves for Brent and Western Texas
Intermediate (WTI) dropped in August 2014 for the next 5 months when compared to the
previous month, but market participants expect both benchmarks to slightly rise after this
period until September 2015. The NYMEX Brent forward curve for delivery in the next 4 months
(represented by the blue line in the graph above) dropped by $2 USD/Bbl to $108 USD/Bbl,
while WTI (the red line) shed $1 USD/Bbl to reach $101 USD/Bbl for the same delivery
period. The Brent-WTI spread decreased to $10 USD/Bbl (the purple area) on average for the
next 25 months.
Crude oil prices for short-term delivery until the end of the year fell on both sides of the
Atlantic Ocean in August due to weak economic data, which hinted at softening oil demand
and ample supplies. Some fears about European economic growth arose this August, at least
in the short-term, following the shrinking of Germanys economy, France posting no growth,
and Russia and the European Union imposing sanctions against one another regarding the
Ukraine crisis. Additionally, OPEC production has neared a 6-month high, while U.S.
production levels are on the rise and may reach their highest levels since 1972, according to
EIA estimates.
3
3 Short-Term Energy Outlook, EIA, August 12, 2014, accessed August 25, 2014, http://www.eia.gov/forecasts/steo/.
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North American Natural Gas Spot Prices (ICE)
On the Intercontinental Exchange (ICE), natural gas prices dropped as tepid demand and
strong supplies pushed prices down in all observed North American hubs by the end of
August 22, 2014. As ICE data showed in this month, New Yorks Transco Zone-6
experienced the largest fluctuations, ranging from $2.15 USD/MMBtu to $2.91 USD/
MMBtu, yet remained the cheapest among all observed cities. On ICE, monthly average gas
prices fell in New Yorks Transco Zone-6 by 15% to $2.51 USD/MMBtu, in Chicago Citygates
by 7% to $3.91 USD/MMBtu, in Henry Hub by 7% to $3.85 USD/MMBtu, and in Californias
PG&E Citygate by 6% to $4.49 USD/MMBtu.
For the week ending August 20, 2014, EIAs Natural Gas Weekly Update reported that natu-
ral gas spot prices dipped due to falling temperatures in most parts of the country. EIA report-
ed that U.S. consumption decreased (a 1.3% decline in power-sector gas consumption) as
temperatures remained cooler than normal in most areas of the country.
4

4 Natural Gas Weekly UpdateWeek Ending August 20, 2014, U.S. Energy Information Administration,
August 20, 2014, accessed August 25, 2014, http://www.eia.gov/naturalgas/weekly/.
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Henry Hub Natural Gas Forward Curve (ICE)
On the Intercontinental Exchange (ICE), natural gas futures available for trade in the next
12 months at Henry Hub were relatively flat in August 2014 when compared to the previous
month, as cool temperatures persisted in much of the country. The average price of Henry Hub
natural gas in August 2014 for September 2014-September 2015 contracts (represented
above by the orange line) dropped by 2% to $3.93 USD/MMbtu when compared to July 2014
(represented above by the blue line) for delivery in the same period.
When compared to last month, Henry Hub natural gas futures in August 2014 fluctuated
1% less, varying between $3.79 USD/MMbtu (May 2015) and $4.14 USD/MMbtu (January
2015) for delivery in the next 12 months. Data from ICE suggests the spread between August
2014 and previous month contracts (represented above by the red bar) dropped by
$0.08 USD/MMbtu until September 2015.
For the week ending August 20, 2014, EIAs Natural Gas Weekly Update reported that
temperatures in the lower 48 states averaged 23 Celsius in the fourth week of August 2014,
below the 30-year normal temperature.
5
Also, storage builds from the previous period were
larger than market expectations of 84 billion cubic feet (Bcf) by 4 Bcf, with all 3 regions
posting larger-than-average builds during this period.
5 Natural Gas Weekly UpdateWeek Ending August 20, 2014, U.S. Energy Information Administration, August 20, 2014, accessed
August 25, 2014, http://www.eia.gov/naturalgas/weekly/.
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Actual Weather (AccuWeather)
From July 2014 to August 22, 2014, the rise in temperature slowed down in all observed
North American cities, indicating the end of summer. The monthly average temperature in
San Diego stayed at 23 Celsius (C), while the temperature dropped in Chicago and New York
by 2 degrees to 21C and 23C, respectively. On the other hand, San Antonio got warmer by
1 degree, feeling like 32C when compared to the previous month.
In August 2014, the 2-year average in all observed cities was varied. When comparing the
past 2-year average of August temperatures to August 2014 temperatures, this years August
felt 1 degree warmer in San Diego, but it felt slightly cooler in Chicago, San Antonio, and
New York by 3, 1, and 2 degree(s), respectively. In August 2014, the city of Chicago
experienced the largest fluctuations again among all observed cities, as the city reached
16C mid-way through the month and felt like 27C on August 22. This years August ended up
being slightly mellower than the normal seasonal pattern for this time of year, based on the
2-year average temperature and the previous month.
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Electricity: Day-Ahead Prices (ICE)
On the Intercontinental Exchange (ICE), electricity day-ahead prices fluctuated in different
directions in August 2014 when compared to the previous month. From July to August 2014,
electricity day-ahead prices fell in NYISO by 23% to $38 USD/MWh, in PJM by 17% to
$40 USD/MWh, and in CAISOs SP15 by 6% to $50 USD/MWh. On the other hand,
ERCOT (Texas) day-ahead prices rose by 10% to $40 USD/MWh when compared to the
previous month.
When comparing August 2014 to August 2013, data from ICE shows that NYISO and PJM
dropped by 17% and 5% from $46 USD/MWh and $42 USD/MWh, whereas CAISOs
SP15 and ERCOT went up by 11% and 9% from $45 USD/MWh and $37 USD/MWh in
2013, respectively.
According to the latest EIA Short-Term Energy Outlook report, which was released on
August 12, 2014, residential sales of electricity in 2014

are expected to average 2.1% more
than in 2013
.6
Although the EIA estimates that U.S. retail sales of electricity to the industrial
sector will remain relatively flat in 2014, the commercial sector is expected to push electricity
sales by 1.2% in 2014 due to the strong growth of industrial consumption in the West South
Central area. On the supply side, EIA projected that total U.S. electricity generation in 2014 is
expected to grow by 1.1% from 2013 to an average of about 11,200 gigawatt hours per day.
According to the EIAs latest report, coal and natural gas are the leading sectors in U.S.
electricity generation, as they have the largest share of total generation41% and
28%, respectively.
6 Short-Term Energy Outlook - August 12, 2014 014, U.S. Energy Information Administration, August 12, 2014, accessed
August 25, 2014, http://www.eia.gov/forecasts/steo/report/electricity.cfm.
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By Vera Tikhomolova
The Future of the Natural
Gas Market
Part Two: Global Demand and Major Consumers
The July 2014 edition of ZE DataWatch included the first In Depth article
in this two-part series about geopolitical and market trends affecting the global
natural gas market. Last months article discussed current events impacting global supply;
this months issue will address demand.
Introduction: Trends in Global Demand
The global natural gas market has become more dynamic in recent years, in part due to the
substantial global increase in natural gas consumption (Figure 1).
Figure 1: Natural Gas Consumption around the World
Source: EIA (http://www.eia.gov)
August 2014 68
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It is clear that this demand will only increase further. The EIA projected an increase of 1.7 %
annually between 2010 and 2035 in its last Annual Energy Outlook report.
1
BP expected an
increase of 1.9% annually between 2012 and 2035 in its 2014 Energy Outlook 2035.
2
Asian demand has been the largest driver of global natural gas market development recently.
As shown in Figure 2, the biggest demand increase is expected in China. In OECD-Europe
3

countries, demand is projected to remain at a high level.
Figure 2: Demand by Region
It is obvious that due to the partial switch from nuclear to gas in Europes power sectorthe
aftermath of the 2011 Fukushima nuclear disaster in Japannatural gas has become more
important as a global energy source.
Even if the Fukushima accident hadnt happened, several developments would have posed
attractive alternatives to nuclear power anyways: the reduction of coal-fired power
generation in Europe and North America; increased intermittent wind generation; and
clean-fuelled, quick-starting natural gas-fired generation. The operating cost differences
between gas-powered generation and coal and nuclear generation are offset by meeting
regulations. Overall, the increase in gas-fuelled power has driven natural gas demand.
As shown in Figure 3, Europe and Asia are expected to remain major natural gas importers in the
coming years. Moreover, Europe is expected to increase its natural gas imports due to growing
demand and declining domestic production, mainly in the U.K. and the Netherlands. The Asia
Pacific is expected to become the largest importing region in ten years. China and India are
constantly increasing their exports and will remain the biggest market players in the near future.
1 Annual Energy Outlook 2014With Projections to 2040, EIA, April 2014, accessed August 20, 2014,
http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf.
2 BP Energy Outlook 2035, BP, January 2014, accessed August 20, 2014,
http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-Outlook/Energy_Outlook_2035_booklet.pdf.
3 OECD - the Organization for Economic Co-operation and Development (OECD)mainly includes European countries, North American
countries, and Chili, Japan, Korea, Australia, and New Zealand.
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Figure 3: Regional Net Export
Since the global natural gas market has been in the
process of developing, the structure by which gas is
imported has changed. With shale gas development
in the U.S. and new liquefied natural gas (LNG) export
capacities that have come on stream in Qatar, imports
of LNG are rising. It is apparent that Europe and Asia
are major areas of interest and sources of conflict for
the worlds biggest natural gas exporters. Current large
exporters (Qatar, Russia) and potential exporters (the
U.S.) are trying to use different strategies to increase
their deliveries into these regions.
The European Market
Figure 4 reveals that only two European countries produce more natural gas than they
consume: Norway and the Netherlands.
Figure 4: Natural Gas Production and Consumption, 2012
Figure 5 also shows that the only European countries which export natural gas are Norway and
the Netherlands.
Source: BP (http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-Outlook/Energy_
Outlook_2035_booklet.pdf)
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August 2014 71
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Figure 5: Natural Gas Net Export
As a result, many European countries are Russias largest natural gas importers, as can be
seen in Figure 6.
Figure 6: Gazprom Natural Gas Exports and the Total Imports of European Countries
Source: Gazprom, EIA (http://www.gazprom.com/about/marketing/europe/)
(http://www.eia.gov)
Gazprom supplied Europe with 161.5 billion cubic meters5703.3 cubic feet
4
of gas in
2013, remaining the key gas supplier to the European market.
4 Europe, Gazprom, accessed August 20, 2014, http://www.gazprom.com/about/marketing/europe/.
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August 2014 72
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However, the European gas market is currently experiencing a significant change. Recently
Middle Eastern and North American LNG companies have been making efforts to enhance
their positions in the European market, creating LNG contracts that are beneficial for
European consumers. As a result of natural gas hub developments, including the U.K.
National Balancing Point (NBP), Belgium Zeebrugge, and the Netherlands TTF, spot trades are
becoming very real, very attractive alternatives to oil-indexed contracts. Spot supplymost
of which is currently from Qataris a relatively cheap way to meet demand in comparison to
expensive long-term oil-indexed contracts.
Consequently, Norwegian Statoil recently signed a 13 billion supply agreement with U.K.
utility Centrica that links natural gas prices to NBP benchmarks. Centrica also signed an
agreement with Qatar for 2.4 million tons (3.26 bcm) per year of LNG supplies.
Moreover, due to the shale gas revolution in the U.S., large amounts of LNG are expected to
be delivered to European spot markets. For example, in June 2014 Gas Natural from Spain
signed a contract with Cheniere that links natural gas prices to the U.S. spot market
(Henry Hub). BG Group signed a similar contract with Cheniere in 2011.
Given these changes, the majority of European natural gas market participants are doing
everything they can to get Gazprom and other long-term suppliers to revise the terms of their
contracts. Big international companies are also looking for a way to develop substantial shale
reserves in Eastern European countries, primarily in Poland and Ukraine.
Overall, it is very difficult to predict who is going to improve or lose their positions in the
European natural gas market, even in the near future.
The Asian Market
As can be seen in Figure 7, Asian consumption is much larger than Asian production. China,
Japan, and South Korea are currently major natural gas consumers.
Figure 7: Natural Gas Net Exports (Asian Countries)
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August 2014 73
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Qatar has been exporting natural gas to the Asian market for a long time. The U.S. has also
started exporting LNG to Japan and some other Asian countries. Gazprom, too, has been
trying to improve its position in this market.
Russia has been attempting to create long-term contracts with China for many years. Finally,
given recent events in Ukraine, this dream became a reality: Russia recently secured an
unprecedented 30-year contract with China, which gives Moscow access to a mega market
for its leading export. Under this contract, Western Siberia will begin to deliver gas supplies to
China from 2018-2020. The final price of Russian gas, which will flow through a 2,500 mile
pipeline from two fields in Siberia, has not been disclosed. Historically, China has paid less
for natural gas than Gazproms European clients dothroughout the 2000s, Beijing signed
numerous governmental memorandums with Turkmenistan, Uzbekistan, and Kazakhstan, all
of whom sell this commodity at a rate much lower than Gazproms European rates. Russia can
try to charge an established price close to what European countries pay, but China will likely
appeal for a price akin to that of the cheaper gas it buys from Central Asia.
Gazprom is also looking to expand its cooperation with Japanby this years end the
company expects to sign binding agreements with leading Japanese energy companies
concerning supplies from the planned Vladivostok (Pacific Ocean region) LNG export project.
The potential extension of the future Sino-Russian gas route to the Indian border is also
possible, as the Indian market has become significant. Gazprom already made a deal in 2011
to supply 2.5 million mt/year of LNG to India and is expecting a substantial increase in
this amount.
5
Ultimately, while Qatar remains on the market, it is unlikely that Gazprom will be able to
provide natural gas to the Asia Pacific region at oil-indexed prices.
Other Market Drivers: Geopolitical Tensions
Geopolitical tensions have been an important driver of the crude oil market for a long time. In
the natural gas market, geopolitical tensions resulting from globalization are becoming
increasingly important too. This is not only because natural gas contracts in Europe and Asia
are related to global crude oil prices, but because of worldwide battles for the control of the
natural gas markets development.
For example, Qatar would make more money selling LNG to Asia under long-term indexed
contracts than they would by feeding the European spot market with supplies in the short to
medium term. However, Qatars sales in Europe are not only related to pure sales, but to
politicsultimately it is important for Qatar to sell gas in Europe, although this is less
profitable than Asian sales.
Gaining control over Ukrainian shale gas production is very important to European natural gas
market players. Moreover, the instability in Ukraine could also be a reason why LNG export
5 Gazprom Marketing & Trading Singapore Plans to Export 2.5 Million Tonnes of LNG to India Annually, Gazprom, July 21, 2011,
accessed August 20, 2014, http://www.gazpromexport.com/en/presscenter/news/281/.
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August 2014 74
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terminals in the U.S. have recently received fast-tracked approvals, as these terminals will
ship gas to China and Japan, both of whom pay a 50% price premium in comparison to
Europe. A newly created U.S. State Department group is promoting the fast-tracking of LNG
export terminals, using the Ukrainian crisis as a pretext.
The Ukrainian crisis and resulting sanctions have pushed Gazprom to sign an incredible
contract with China, and the price of future gas to be delivered as per this agreement is
still under discussion. This contract is ultimately of interest because it is possible that its
agreed-upon prices will be linked to Central Asian producers. Traditional Gazprom contracts
are more expensive than the gas that China buys from Central Asia. As a result, Russia may be
under pressure to renegotiate European prices too.
Finally, for the first time ever in the history of relations between the U.S. and Russia, possible
economic sanctions against Russia as a result of the Ukraine crisis may have a long-term
negative effect on global energy security.
Conclusion
Over the past several years, researchers have argued that natural gas pricing is in transition
worldwide. In almost every country, long-term international gas contracts established many
decades ago are under review. This is mainly due to the different dynamics of the current
gas market.
Since 2011, a number of long-term LNG import contracts have been signed based on a
benchmark formula. It is quite unlikely that as broader fundamentals tighten, gas will remain a
producers market with oil indexation in Europe and Asia.
In Europe, the development of the spot market, which depends on an increasing share of
Qatari and U.S. LNG, will create financial problems for mid-stream utilities who were obliged
to purchase gas under long-term contracts priced according to a formula linked to oil
products. In addition, despite Asias unprecedented 30-year contract for Russian gas
delivered to China, the region still requires spot LNG cargoes as well.
Gazprom needs to revise its export policy to European countries, as the development of the
LNG spot market could seriously harm the countrys export revenues. The large percentage of
global LNG sold as spot cargoes and unconventional natural gas development have been a
key focus for industry participants. However, spot cargoes are not entirely cheap in Europe.
Currently Europe is not technically prepared for a large-scale replacement of Gazproms
pipeline gas with spot market gas. To be prepared, Europe must build expensive facilities to
decompress and store gas, as well as construct new pumping stations that utilize large
volumes of LNG. This infrastructure will further add to the price of Europes gas.
Ukrainian geopolitical tensions may also lead to further changes in the European natural gas
market. Currently 40% of Gazproms natural gas transportation infrastructure runs through
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Ukraine. Ukraine has been considering a joint venture with European and U.S. companies,
who may run the gas network and request to renegotiate transit deals any time.
Meanwhile, the U.S. Department of Energy has approved the export of LNG to non-Free Trade
Agreement countries (to Asia in particular), but this has led to uncertainty as to whether this is
a solution to the fundamentals problem in Asia. In addition, the establishment of a reliable
reference price for the market has not yet taken place, as the spot cargo market is not liquid
enough to do so. Whether the determination of LNG buyers to promote a market-based
solution to their pricing problems will be sufficient is not yet clear.
Geopolitical tensions only boost uncertainty. With continuous conflicts in the Middle East and
North Africa, there is no way to predict future natural gas flow from this region. Given the
escalation of the Ukrainian conflict, economic factors alone do not paint a complete picture of
the European natural gas markets development. Instead, political reasons, such as possible
sanctions against Gazproms hegemony, should be taken into consideration as well.
Overall, future natural gas prices are currently the product of many assumptions. With the
development of the liquid natural gas spot market in Europe, the changing Asian market,
increased shale gas production in the U.S., possible shale gas production in Europe and Asia,
and potential changes to pricing mechanisms, it is clear that natural gas prices around the
world will eventually adjust to new realities.
Bibliography
Annual Energy Outlook 2014With Projections to 2040. EIA. April 2014. Accessed
August 20, 2014. http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf.
BP Energy Outlook 2035. BP. January 2014. Accessed August 20, 2014.
http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-Outlook/
Energy_Outlook_2035_booklet.pdf.
Europe. Gazprom. Accessed August 20, 2014.
http://www.gazprom.com/about/marketing/europe/.
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Gazprom Marketing & Trading Singapore Plans to Export 2.5 Million Tonnes
of LNG to India Annually. Gazprom. July 21, 2011. Accessed August 20, 2014.
http://www.gazpromexport.com/en/presscenter/news/281/.
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