NYMEX coal contract begins with 98 trades


By the OGJ Online Staff

HOUSTON, July 12 -- Trading in the long-stalled New York Mercantile Exchange Inc. coal futures contract began Thursday with 98 contracts changing hands by the close of the market.

NYMEX spokeswoman Nachamah Jacobovits said the exchange was "reasonably pleased" with the first day's results. Most observers don't expect a high level of liquidity at the outset of the market.

NYMEX first began work on the contract 3 years but delayed introducing it until now. Observers said the delay appeared to be result of a slow start for NYMEX electricity contracts.

"Choice is good," said a spokesman for Dynegy Inc., which buys and sells coal on line and is active in the over-the-counter market.

Interest in the coal futures contract perked up after 900 coal contracts were traded in one day on the over-the-counter market last September. That was a big increase and showed there was a need for a financial instrument to lay off risk, said Thad Huetteman, a consultant and president of Power & Energy Analytic Resources Inc., in Atlanta, which markets an analytic tool for mark-to-market accounting in coal-power market positions.

Up to now, the market has used the so-called "NYMEX look-alike" contract as a reference product to trade against. NYMEX contract specifications have become an industry standard for cash and over-the-counter trading. OTC trading has dropped back down to 5-10 contracts/day, Huetteman said, from 300-400/month last fall when rising gas prices helped drive up coal prices.

Most coal is sold under long-term contracts that are tailored to the needs of specific buyers. That dampened volatility, but Huetteman said he expects volatility to increase in the future and people will want to lay off some of the risk. That should help spark interest in the futures contract.

Traders said the market is still in the transition stage, as long-term coal contracts expire, but it is growing. Coal is generally quoted on a quarterly basis going forward and as a 12-month strip in the OTC market.

Three coal products are being actively traded, two in the West and one in the East. The NYMEX look-alike contract traded in the East is a 1% sulfur 12,000 btu Appalachian coal barge product with a trading area on the Ohio River near at Big Sandy.

The other two are Powder River Basin coal products transported by rail. One is 8,800 btu and the other is 8,400 btu. Some puts and calls, straddles, and swaps also are being traded, traders said.

Related Articles

EPA proposes voluntary methane reduction program for gas industry

07/24/2015 The US Environmental Protection Agency proposed a voluntary methane reduction program for the natural gas industry that would allow companies to ma...

Petrobras workers stage 24-hr strike

07/24/2015 Workers at beleaguered Petroleo Brasileiro SA (Petrobras) staged a 24-hr strike across Brazil to protest plans by the state-owned company to liquid...

MARKET WATCH: Oil futures hover below $49/bbl

07/24/2015 Light, sweet crude oil futures prices settled under $49/bbl July 23 on the New York market, which means US prices have slid more than 20% since the...

Separate Murkowski bill addresses crude exports, OCS revenue sharing

07/24/2015 US Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) introduced legislation that would end the ban on US crude oil expor...

MARKET WATCH: Oil futures plunge below $50/bbl

07/23/2015

Light, sweet crude oil futures prices plunged lower to settle below $50/bbl on the New York market on July 22.

Cornyn calls for more US energy exports in wake of Iran deal

07/23/2015 US Senate Majority Whip John Cornyn (R-Tex.) said it would be geopolitically, economically, and strategically absurd for the US to maintain outmode...

Post-sanctions Iran initially won’t shake markets up, executive says

07/22/2015 Iran’s resumption of oil and gas exports, once sanctions are lifted under the recently negotiated nuclear limits agreement, probably won’t flood gl...

UAE easing gasoline, diesel price controls

07/22/2015

The United Arab Emirates is moving prices of gasoline and diesel toward deregulation effective Aug. 1.

BC bill advances Pacific Northwest LNG

07/22/2015 The British Columbia legislature has passed a controversial bill enabling the proposed Pacific Northwest LNG export project to advance (OGJ Online,...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.

register:WEBCAST


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected