An analysis recently done by the New York Mercantile Exchange says that energy-oriented hedge funds trading in the natural gas market do not cause undue price volatility on Nymex. Since last October, however, market participation and influence of hedge funds has skyrocketed, with one source estimating that some 75 commodity funds may now be participating on Nymex. In a study released in March, Nymex says it used proprietary market data to find that hedge funds represented only 9.05% of all gas-futures trading volume in the first eight months of 2004 and 20.4% of gas-futures open interest. Participation in the exchange's crude oil trading volume was even less. "It appears that hedge funds have been unfairly maligned by certain [parties] who are seeking simple answers to the problem of substantial price volatility in energy markets...," Nymex reports. The futures exchange concludes that observers and critics should instead focus on the dramatic increase in gas demand as the driving force behind gas-price movements on the exchange.
Recommended Reading
Not Sweating DeepSeek: Exxon, Chevron Plow Ahead on Data Center Power
2025-02-02 - The launch of the energy-efficient DeepSeek chatbot roiled tech and power markets in late January. But supermajors Exxon Mobil and Chevron continue to field intense demand for data-center power supply, driven by AI technology customers.
Oil, Gas and M&A: Banks ‘Hungry’ to Put Capital to Work
2025-01-29 - U.S. energy bankers see capital, generalist investors and even an appetite for IPOs returning to the upstream space.
Riverstone’s Leuschen Plans to IPO Methane-Mitigation-Focused SPAC
2025-01-21 - The SPAC will be Riverstone Holdings co-founder David Leuschen’s eighth, following the Permian Basin’s Centennial Resources, the Anadarko’s Alta Mesa Holdings and the Montney’s Hammerhead Resources.
Utica Oil Player Ascent Resources ‘Considering’ an IPO
2025-03-07 - The 12-year-old privately held E&P Ascent Resources produced 2.2 Bcfe/d in the fourth quarter, including 14% liquids from the liquids-rich eastern Ohio Utica.
The Private Equity Puzzle: Rebuilding Portfolios After M&A Craze
2025-01-28 - In the Haynesville, Delaware and Utica, Post Oak Energy Capital is supporting companies determined to make a profitable footprint.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.