Natural Gas Trading

Natural Gas Trading

natural-gas-trading-risk-management

What Is Natural Gas Trading

Natural gas is a fossil fuel formed from dead plant matter that is trapped between rock deposits deep beneath the earth’s surface. It is a popular commodity amongst day traders, because the physical commodity is not handled or delivered at expiry. Trading in Natural Gas is similar to trading in other commodities like gold and crude oil. Prospective investors need to execute basic and technical analysis of the market in addition to a thorough understanding of what affects Natural Gas pricing. This include weather, storage, supply and demand. Investing in natural gas used to be a complicated process, but traders can now speculate on the price of natural gas online using CFDs(also known as Contracts for Difference) to go both long and short.

natural-gas-trading

Benefits of Natural Gas Trading

Current changes in the industry, such as compressed natural gas (CNG) has changed the economics of the business making trading in natural gas more practical. Natural gas is considered a much more environmentally-friendly fuel than petroleum or coal. Since, there is an increased demand for clean fossil fuel, traders would make a killing if the trend continues. It is also relatively safe because it is lighter than air. So in the event of a leak, it will dissipate quickly.  Investing in natural gas is a way to bet on a weak US dollar and higher inflation. Natural gas is priced in US dollars, so the performance of the world’s largest economy can impact its price. The US Federal Reserve Bank has kept interest rates low and the US dollar weak for many years. A weak dollar could stoke inflation concerns. Since there is a limited supply of natural gas, the price of the commodity could benefit from fears of inflation. Investing in natural gas is a way to diversify an investment portfolio. If you are an investor seeking true asset class diversification, investing in natural gas allows you to diversify your investment portfolio.

Challenges of Natural Gas Trading

One of the major challenges of Natural Gas trading is political risk. This takes the form of political stability and laws and regulations. The latter defines the operations of oil and gas companies, while the former affects the latter. In most cases, the deals which a company starts with may not be what they end with. Since most of the easy-to-get oil and gas reserves are already tapped out or are in the process of being tapped out, the difficulty of extraction has increased, thus increasing the risks and possibly the pricing, supply and demand of Natural Gas. This is because of the more challenging the circumstances (regulation and difficulty level of the drill), the higher the operational costs.

Trends In Natural Gas Trading

AI will soon become a commonplace tool used to achieve operational and business performance in Natural Gas trading. Pattern recognition, natural language processing, and image analysis and recognition will be among the most common use cases. These will encourage operational transparency and minimize human interaction. The consequence will improve ecosystems where automation enhances the management of asset conditions and improved decision making. With better IT operating models, there will be an increased dependence on disruptive business models that fuel agility, innovation and ultra-low-friction transactions.

EnHelix Natural Gas Trading and Risk Management software just made Natural Gas trading very easy. Managing your Natural Gas business from the early stages to the more advanced stages like LNG terminals and power plant is now as simple as reading this article.

What is Natural Gas Trading and Risk Management

Natural Gas Trading and Risk Management software is that category of software applications, architectures and tools that support the natural gas business processes associated with trading natural gas and liquefied natural gas and management of all its associated price and financial risks.

Natural gas in United States are normally priced against NYMEX Henry Hub and basis pricing like PLATTS’ Gas Daily and First of Month with MMBTU as the unit of measurement. Trades are valued daily with simple calculations of position multiply by volume (MMBTU).

Like the super software that it is, EnHelix simplifies your complex energy value chain and makes it easy for you to manage. Designed to cater to all niches in the natural gas and LNG business, it offers you integrated operations, reduces your IT costs and increases your business visibility.

natural gas trading software
natural gas trading software

Natural Gas Scheduling

One of the most important part of Natural Gas Trading business is the pipeline scheduling of natural gas to meet customers’ obligations. The scheduling is normally performed by the concept of nominations. Nominations are formal submission of receipts or deliveries of gas on different gas trading locations. Pipeline companies or sometimes refer to service providers require all contract customers to submit their nominations to specify the volume of gas

ETRM Benefits

With the EnHelix software, you get a premium software that supports Midstream gathering, transportation, gas processing, storing, and fractionating and LNG. So you needn’t worry about the midstream WebSuite portal which enables operators to manage shippers’ nominations, contracts and invoices any more. Our EnHelix will help you handle those concerns of yours.

Indeed, the software takes logistics solutions a bit farther than the others with its scheduling system, which allows shippers to track nominations and scheduled volume. You also get full support for your natural gas economics modelling, asset development and engineering capital projects when you use the EnHelix software.

What’s more, our software integrates with operations for measurements and alerts and offers you a global view of your entire natural gas business and the attendant risks and, provides a secure and singular system to lower costs and improve the productivity of your business.

Other benefits of using EnHelix Natural Gas Trading and Risk Management Software include:

  • Supports risk reporting including mark-to-market, realized PNL, sensitives with built-in comprehensive data warehouse reporting
  • Integration with ICE and NYMEX FIX trade gateway with latest secure FIX protocol for seamless trade and confirmations interfaces
  • Automatic contract document generations and workflow
  • Integrated with EnHelix Artificial Intelligence to help drive profitable decisions and minimize mistakes
  • The EnHelix software takes logistics solutions a bit farther than the others with its scheduling system. This allows shippers to track nominations and scheduled volume.
  • You also get full support for your natural gas economics modelling, asset development and engineering capital projects when you use the EnHelix software.
  • Integrated with EnHelix Blockchain for physical trading and settlement for security, automation and transparency
  • Our software integrates with operations for measurements and alerts
  • What’s more, you get a global view of your entire natural gas business and risks when you use the EnHelix software.
  • Last but not least, EnHelix software provides a secured and singular system to lower costs and improve productivity

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