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Energy

Overview

Traders can utilize the energy markets through our sophisticated front-end solutions in the form of futures, options, spreads, synthetics and swaps to minimize the risk associated with adverse price movements in crude oil, heating oil, gas and natural gas. We facilitate the technology and high-end connectivity needed to access the energy markets so that its clients can achieve their speculative, commercial commodity risk management, hedging, consulting, energy management programs needs:

• Crude Oil and Natural Gas Producers - to protect against lower prices on their production.
• Refineries - to protect against higher crude oil costs and against declines in refinery margins.
• Pipeline Shippers - to protect against declining value of inventories.
• Wholesalers - to protect against both contract purchases and contract sales.
• Retailers - to protect against both inventories price decline and retail margin decline.
• End Users - to protect against increasing prices on anticipated purchases.
• Freight Shippers - to protect against increases in fuel surcharges.
• Speculators – to capitalize on price movements and speculative purchase and sales.

As a whole the energy complex is the largest volume commodity group traded in the world, and it is also among the most volatile. Trading in the energy markets are offered around the clock through ICE, NYMEX (e-miNYsm energy futures) and the CME Globex energy futures:

Crude Oil Futures: The NYMEX’s light, sweet crude oil futures contract is the world's most actively traded futures contract on a physical commodity. Light, sweet crude is preferred by refiners because of its low sulfur content and relatively high yields of gasoline, diesel fuel, heating oil, and jet fuel. The CME offers the E-Mini crude oil futures, which are just 50% of the size of a standard futures contract and trade almost 24 hours per day.

Unleaded Gasoline Futures: Gasoline is the largest single volume refined product sold in the United States and accounts for almost half of national oil consumption. It is a highly diverse market, with hundreds of wholesale distributors and thousands of retail outlets, often making it subject to intense competition and price volatility. It is based on delivery at petroleum products terminals in the harbor, the major East Coast trading center for imports and domestic shipments from refineries in the New York harbor area or from the Gulf Coast refining centers. The futures contract specifications conform to those for reformulated gasoline, required in many areas for controlling emissions that can adversely affect air quality. NYMEX provides trading in gasoline futures contracts.

Heating Oil Futures: Heating oil, also known as No. 2 fuel oil, accounts for about 25% of the yield of a barrel of crude, the second largest "cut" after gasoline. Closely related to heating oil is kerosene, which is in addition to NYMEX heating oil futures. The NYMEX provides trading in gasoline futures contracts.

Natural Gas Futures: Natural gas accounts for almost a quarter of United States energy consumption, and the NYMEX natural gas futures contract is widely used as a national benchmark price. The price is based on delivery at the interstate natural gas pipeline systems that draw supplies from the nation’s dense gas deposits. The pipelines serve markets throughout the U.S. East Coast, the Gulf Coast, the Midwest, and up to the Canadian border. The CME E-mini natural gas futures contract, designed for investment portfolios, is 50% of the size of a standard futures contract. The natural futures contract is available for trading on the CME’s Globex electronic trading platform almost 24 hours per day.