Oil Traders Step Up Involvement In LNG Market

Oil Traders Step Up Involvement In LNG Market

Trafigura is blazing a trail for trade houses, adopting highly successful tactics used in oil markets, to get an edge in the burgeoning liquefied natural gas (LNG) sector.

Oil traders usually act as a go-between for producers and end users, investing in logistics and storage to facilitate trade, while also providing credit and shouldering risk for their customers.

Commodity traders are now stepping up their activity in LNG, adding liquidity and carving a niche in a market previously dominated by producers and oil majors such as Qatar and BP , as new supplies create fresh trade opportunities.

Trade houses including Vitol, Noble Group and Guvnor are also attracted to LNG through rising global supply, growing competition and increasingly scattered pockets of demand fuelling spot market trade.

Swiss-based Trafigura, best known for its oil and metals business, is leading the pack, having become the top LNG trader in around two years after leaping into LNG markets in 2013 with a major deal to supply Mexico.



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