Electronic commodity exchanges such as IntercontinentalExchange (ICE) and Dynegydirect have gained significant market share over the past few weeks as EnronOnline has fallen out of favor due to Enron’s financial turmoil, failed merger with Dynegy and subsequent bankruptcy filing. ICE reported that natural gas volumes on its system set a new daily record Tuesday with a total of 422 Bcf traded.
“Over the past couple of weeks, we have seen a steady increase in natural gas trading,” said ICE COO Chuck Vice. “Last week, the [December] bidweek for natural gas volumes increased by 40% over [November’s] bidweek. This week we have continued the trend with strong volumes across the board and a record trading day in natural gas.”
ICE reported that the number of bids, offers and price changes on the system has doubled, while the number of new user requests is up 400% from two weeks ago. A spokesman for ICE said that business has really boomed since EnronOnline went offline. “I have not set the phone down since I got in today,” he said. “I have been answering messages with people pleading that they had to get on [sign up for] the system now!” The spokesman said the system has added 600-700 customers since last week, with transactions up 67%. A week ago the system did 2,500-2,700 transactions a day; now the company is processing 3,700-4,000.
Dynegydirect said that while it only reports transaction volumes and related data quarterly, it acknowledged that it has also been experiencing a business boom after Enron’s difficulties.
“Since Oct. 1, volumes on Dynegydirect have significantly increased and we have seen significant increases in physical business,” said Steve Stengel, Dynegy spokesman. “The number of customers accessing Dynegydirect has doubled and the number of customers executing electronic trading agreements is up 20%.”
Wanting to provide customers self-service access to bid and offer prices for a range of energy and communications products. Dynegy launched its B2B trading site in November 2000 (see Daily GPI, Oct. 17, 2000). After only six weeks of operation, Dynegydirect said that it had already exceeded $1.5 billion in online notional transactions, with more than $1 billion of the energy and communications commodity transactions generated by new customers. After just six weeks, the site also had more than 400 registered users (see Daily GPI, Dec. 12, 2000).
As an open-access, multilateral electronic marketplace, ICE said it has built a strong track record of offering increased liquidity and transparency to OTC market participants. To date, over 400 of the world’s largest commodity trading firms are now ICE participants.
The company said that its electronic trading system is installed on over 8,000 desktops worldwide, from which traders log on to trade more than 600 listed commodity and derivative contract types. The system trades crude oil and refined products, natural gas, power, precious metals, weather derivatives and emissions allowances. Contract forms on the system include physical delivery as well as financially settled swaps, spreads, differentials and options based on a variety of fixed and floating price indices.
ICE is based in Atlanta, with offices in New York, Houston, Chicago, London and Singapore.
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