Glencore Xstrata, the commodities trading conglomerate, has entered the high margin liquefied natural gas trading market. This marks the turning point for the industry that has been for a long time under the tight grip of major oil firms on the long term supplies to the market.
One of the major moves is the hiring of a four person team of traders from Morgan Stanley from offices in London and Singapore. Morgan Stanley, for its part is cutting back on its commodity trading business.
Many industry experts view the move can result in the onrush of new market players that seek to exploit the price margins between the Asian, American and European gas markets.
The LNG commodity market is one of the fastest growing markets because of the high volume of the gas that is being shipped out of Indonesia, Nigeria, Qatar and other countries.
A great number of LNG trading operates using static long-term agreements under the control of major oil companies and a few LNG producing countries. It is projected though that with the entry of commodities traders such as Glencore and Vitol would happen because of the LNG export boom fromthe United States.
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