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By Vera Tikhomolova

The Future of the Natural Gas Market

Part Two: Global Demand and Major Consumers

ZEMA Updated to Collect New CAISO Data Reports

$2.5 Billion Rupee IFC Financing Program to Strengthen India’s Capital Markets

ZE and Interactive Data Develop Integrated ZEMA and FutureSource Solution

Platts to Discontinue Electricity Assessments in ISO Markets

AUGUST 2014

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Delisting of products and data sources

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Changes to data attributes, replacement of products

Editorial 4The Federal Agency Moves Ahead with Improving Natural Gas – Electric Power Markets Coordination:The Concept of Centralizing Natural Gas Trading Is on the Table 4 Power 7Argus Introduces New UK OTC Base and Peak Load Assessments 7Platts to Discontinue Electricity Assessments in ISO Markets 7Argus Removes UK OTC Base Load Assessments 9NYMEX Amends 98 Electricity Futures 10Petroleum 12 Platts to Create M+4 Cash BFOE Assessment 12Platts Launches New US Gulf Coast Clean Tanker Assessments 12Platts Starts 500 CST Rotterdam Barge Assessment 13Argus Adds Calendar Month Average Values to Crude Publication 13Argus Creates New Series in Marine Fuels Publication 13Argus Lists New Assessments in Russian Motor Fuels Publication 14Argus Adds Refinery Gate Values and Netbacks to Crude Publication 15IHS Introduces New Drilling and Completions Solution 15Platts to Remove Q1, Q2 Benzene Assessments and Toluene Assessments 16Platts to Cease Publishing Middle East M2 LPG Differentials 16Platts Discontinues Urals CFD Outrights 17NYMEX Delists the NY ULSD vs. Low Sulfur Gasoil Contract 17Platts to Assess Minas, Tapis Crude Using Full Cargoes 17NYMEX Permits Block Trading in Brent Crude Oil Weekly Options 18Natural Gas 19 PEGAS Introduces Trading in Gas Spot Contracts for British National Balancing Point 19NGX and Alliance Pipeline Launch Services at New US Trading Hub 19EEX to Start Trade Registration Service for Futures on the Brent 901 Formula 20NYMEX Lists New Natural Gas Weekly Financial Option 21NYMEX Removes Three Texas Gas SL Futures 22NYMEX Permits Block Trading in Natural Gas Weekly Financial Options 22Coal 23 Platts Introduces Daily Coal Switching Price Indicator for UK and Netherlands 23Platts Launches CFR India 5,500 NAR Thermal Coal Prices 23New Coal Daily Differential Assessment to Be Added to Argus/McCloskey Coal Price Index 24ICAP Energy Introduces Global Coking Coal Desk 24FIS Brokers First Trades on SGX CFR China and FOB Australia Coking Coal Contracts 25Platts to Remove CFR India 5,900 GAR Prices 26Platts Discontinues Monthly Coking Coal 90-Day Forward Assessments 26NYMEX Delists Australian Coking Coal Futures 26Softs and Metals 27 Platts Begins Publishing Daily London Silver Price 27Platts Starts CIF NWE Industrial Wood Pellet Assessment 27Argus Adds New Argentine SME Upriver Price Assessments 28Platts Discontinues NWE Non-RED SME Biodiesel Assessment 28Platts to Cease Publishing Weekly FOB China Tungsten Prices 29Platts to Remove Daily Kuala Lumpur Tin Price 29Platts to Stop Publishing In-Warehouse Singapore Tin Premium 29Platts to Discontinue Daily In-Warehouse Singapore Lead Premium 29Platts to Cease Publishing FOB China Antimony Price 30Platts to Take Out Weekly CIF Japan Indium Price 30Platts to Refrain from Publishing East Asia Steel Beam, Bar Assessments 30Platts to Cease Publishing East Asian Rebar, Rod Assessments 30Platts to Discontinue East Asian Flat Steel Prices 31Platts to Halt China Domestic Stainless CR 201 Price 31

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August 2014 2

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Platts to Stop China Domestic Pig Iron Price Assessment 31Argus Removes Non-RED Assessments from Biofuels Publication 31COMEX Delists ME Alcoa Aluminum Brand 31COMEX Removes E-Mini Silver Futures Contract 32CME Stops 17 Livestock, Dairy, and Lumber Options 32Eurex Temporarily Suspends Trading in Silver Derivatives with Codes FSFX and OSFX 34Finance 35 New Equity Options Introduced on Euronext N.V. 35ISDA Publishes 2014 Credit Derivatives Definitions Protocol 35IFC Creates $2.5 Billion Rupee Financing Program to Strengthen India’s Capital Markets 36Exegy, TMX Datalinx, and FIF Launch MarketDataPeaks Service in Canada 37Deutsche Börse Creates US Dollar Hedged Version of HDAX 37Two New ETNs from Boost Launched on Xetra 38ICE Acquires Trading Technology Patents 39Traiana Introduces Enhanced Cross-Asset Matching Engine 39ICAP Information Services and MTS Add Eurozone Index to RepoFunds Rate 39CME Launches New Futures and Options for Delivery of Standardized Bundle Combinations 40CME Clearing Europe Receives EMIR Authorization 41Thomson Reuters Begins Elektron Direct Feed 41Thomson Reuters Eikon Expands Access to Dubai Mercantile Exchange 42NASDAQ OMX Adds First Trust Strategic Income ETF 42NASDAQ OMX Lists First Trust Enhanced Short Maturity ETF 43NASDAQ OMX Introduces Compass EMP US Discovery 500 Enhanced Volatility Weighted Index ETF 43CME Delists T-Bill Futures, Index Swap Futures and Options, and HICP Futures 44CME Removes Four Interest Rate Contracts 44HKFE Announces Revised Margins for CITIC Pacific and HKEx Futures 44ICE Benchmark Administration Completes ISDAFIX Transition 45Deutsche Börse and Philippine Stock Exchange Sign MOU 46Weather and Emissions 47 AccuWeather Updates Windows Phone App to Include MinuteCast for Global Locations 47EIA Mapping Tool Shows US Energy Facilities in Areas at Risk of Flooding 48Other 49 NYMEX Introduces Capesize 2014 Timecharter Average (Baltic) Futures 49Baltic Exchange and China’s Xinhua News Agency Release Shipping Center Index 49Platts to Cease Publishing NWE Oxo-Alcohols Assessments 51News from Data Vendors 52 ZEMA Updated to Collect New CAISO Data Reports 52PEGAS: Trading Results in July 55PEGAS to Launch Spot Contracts for NBP 57EPEXSPOT: French Day-Ahead Awakens 58Asia-Pacific Condensate Market Transformation Prompts New Argus Index 60OTC Global Holdings Adds Forwards for Crude Oil 61Monthly Market Analysis 61 Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX) 62Crude Oil Brent vs. WTI: Forward Curve (NYMEX) 63North American Natural Gas Spot Prices (ICE) 64Henry Hub Natural Gas Forward Curve (ICE) 65Actual Weather (AccuWeather) 66Electricity: Day-Ahead Prices (ICE) 67InDepth 69The Future of the Natural Gas Market Part Two: Global Demand and Major Consumers 69

The Federal Agency Moves Ahead with Improving

Natural Gas – Electric Power Markets Coordination:

The Concept of Centralizing Natural Gas Trading Is on the Table

By Olga Gorstenko

August 2014 4

With natural gas-fired power plants taking an increasingly larger share of the electricity mix, the need for seamless transacting and exchanging of information between power producers and gas pipeline operators is becoming critical. The U.S. Federal Energy Regulatory Commission (FERC) is taking another step towards bridging the gap between the natural gas and electric power industries. On August 19, 2014, the Commission announced that on September 18, 2014 it will launch an industry discussion about the potential for the centralization of natural gas procurement and transacting processes.

In the last five years or so, the U.S. energy sector has been changing along two planes: the increase in renewable generation capacity and booming natural gas production. Renewables have been driven mainly by political agendas worked out on different levels of government: local (state) authorities have been implementing renewable energy portfolio requirements, and federal bodies have been supporting them indirectly by tightening emission standards and directly through subsidies. At the same time, the expansion of natural gas production has not been closely tied to politicians’ aspirations;

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instead, it has been driven mainly by the greenback almighty, or euphemistically speaking - economic factors. Meanwhile, regardless of drivers, both of these sources have contributed to the same outcome: natural gas-fired generation capacity has been constantly increasing.

On the one hand, increased natural gas production has been suppressing gas prices; as a result, power producers and utilities keep switching to this type of fuel. On the other hand, managing the intermittency of renewable power production requires additional support. Given the infant stage of energy storage solutions, the most optimal support can be found in dependable generators serving as ancillary services. Of these services, natural gas units remain natural leaders due to the currently lower fuel cost and faster response time. Hence, the growth in renewables has been accompanied by growth in supporting gas-fired units. Also, due to rising environmental compliance costs, coal-fuelled generators leave a lot of space for gas units to fill in. The power industry’s increased use of natural gas puts more pressure on gas suppliers; the expanded use of ancillary services requires more flexibility in scheduling this supply.

The growing interdependence between the natural gas and power markets has become

not only apparent, but even taxing because of gaping differences in how these two industries schedule their services and conduct resource planning. The need for increased coordination between them has been raised over the last several years on the national level by FERC. Read about this in Coordination of Gas and Electric Industries: Increasing Transparency?

FERC has taken the lead by attempting to mitigate and eliminate these disparities in a structured and standardized manner. Over last several months, the Commission has

conducted multiple workshops and meetings; it has also sought written submissions from both industries in order to find collective ground and solutions. Abundant with updates, FERC’s quarterly progress reports reflect the following premise: given the great disparities amongst

existing processes and procedures, the coordination of efforts between these two industries is better carried out on a regional basis. After two years of effort, FERC’s reports continue to be structured by regional initiatives.

It really is not an easy task for the Commission to develop processes that will be accepted by all parties. The attempt to realign the scheduling processes of interstate gas pipelines and public utilities is a good example of this. As per FERC’s report

Editorial

The growing interdependence between the natural gas and power markets has

become not only apparent, but even taxing because

of gaping differences in how these two industries schedule

their services and conduct resource planning.

August 2014 6

Editorial

EditorOlga GorstenkoPhone: 778-296-4183 Email: olga@ze.com

Olga Gorstenko

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Bruce Colquhoun, Phone: (604) 790-3299 Email: bruce.c@ze.com

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from June 19, 2014, after multiple meetings that invited industry participants to consider FERC’s Notice of Proposed Rulemaking (NOPR) and develop consensus-based alternatives to the proposal, “Viewpoints on the Gas Day were split, with a super-majority of the gas industry supporting the current Gas Day start time of 9:00 a.m. Central and a super- majority of the electric industry supporting moving the Gas Day to 4:00 a.m. Central.” In the end, FERC “agreed to disagree” and left related standards as “fill in blank.”

Now, FERC is pushing even harder and aiming way higher by commencing a discussion on centralized natural gas trading. There are two objectives for this discussion, the first of which is less ambitious: finding ways to improve natural gas trading. Several topics on this subject for the forum include:

The near real-time flexibility (e.g. changing or confirming nominations) required for gas-fired generation to ramp on short notice.

The physical and information requirements needed to provide such flexibility on a standardized basis.

The coordination of confirmation processes across pipelines to support trading opportunities.

Improvements like the ones listed above, although not simple to implement, are still eclipsed by the discussion’s major objective: assessing the concept of a centralized trading platform for natural gas. Not short of grandeur, the idea of a centralized marketplace for natural gas is somewhat revolutionary. No doubt, developing a trading platform that would report bids and offers for trading commodity and capacity for receipt and delivery points across multiple pipeline systems, all displayed in a transparent manner, will face a lot of resistance and draw a lot of blood.

No matter what, I wish FERC the best of luck (no sarcasm intended) and hope to witness the realization of its aspirations, whether this will take two or even five years to implement. Do I dare say (or even think) that the power industry will follow? Historically speaking, this has been the case.v

Argus Introduces New UK OTC Base and Peak Load AssessmentsOn August 25, 2014, Argus introduced new assessments to its Argus European Electricity publication. The following new series have been included in the DEL files in the DAEE folder of server ftp.argusmedia.com.

PA Code Time Stamp Price TypeContinuous Forward

Description

PA0012598 6 4 1 UK OTC base load index monthPA0012598 6 33 1 UK OTC base load index monthPA0012600 6 1 6 UK OTC base load monthPA0012600 6 2 6 UK OTC base load month

PA0012603 6 29 0UK OTC base load volume current month

PA0012604 6 29 1 UK OTC base load volume monthPA0012604 6 34 1 UK OTC base load volume monthPA0012607 6 1 6 UK OTC peak load monthPA0012607 6 2 6 UK OTC peak load month

See the original announcement.

ZEMA collects a range of European power market data, including numerous records from Argus. To learn more, visit http://www.ze.com/the-zema-solutions/.

Platts to Discontinue Electricity Assessments in ISO MarketsAfter flow date December 1, 2014, Platts will no longer publish price assessments for markets served by an independent system operator. Platts noted in its related press release that price assessments are largely redundant given the day-ahead, on-peak, and off-peak prices ISOs publish. Platts also claimed that ISO auctions provide price transparency for a much larger number of hubs and zones than are traded in the bilateral market.

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Below are the day-ahead, weekend and near-term bilateral indexes that Platts will discontinue:

• AD Hub• Dominion Hub• Entergy, into• ERCOT, Houston• ERCOT, North• ERCOT, South• ERCOT, West• Illinois Hub• Indiana Hub• MAPP, South• Mass Hub• Michigan Hub• Minnesota Hub• N.Y. Zone-A• N.Y. Zone-G• N.Y. Zone-J• NI Hub• NP15• Ontario• PJM West• SP15• SPP, North

Instead of publishing bilateral price assessments in ISO markets, Platts will publish on-peak and off-peak averages for real-time or hourly prices. This will complement the on-peak and off-peak averages for day-ahead prices Platts currently publishes. In addition to all the locations currently covered by day-ahead averages, average hourly prices for Alberta and Ontario also will be published.

Given its renewed focus on the less transparent physical bilateral markets, Platts is seeking comment on additional locations in the Southeast and West for new bilateral day-ahead price assessments. There are a

number of delivery locations outside of the ISOs traded in the physical markets.

In general, Platts prefers to price one specific location, normalizing transactions from nearby locations. But in some cases a basket approach using multiple locations is considered best by the organization.

Platts is proposing day-ahead, bilateral market assessments for the following delivery locations:

• Into GTC: Georgia Transmission Corp. system

• John Day: The substation for the John Day Dam in Washington State

• NOB: The Nevada-Oregon Border, which is the interface with Pacific DC Line

• Montana: A basket of delivery locations within the state of Montana

• Wyoming: A basket of delivery locations within the state of Wyoming

• Borah: A substation in South-Central Idaho

• Craig: A substation in Western Colorado associated with the Craig coal-fired power plant

• Ault: A substation in Northeastern Colorado

• Pinnacle Peak: A group of substations Northeast of Phoenix, Arizona

• Westwing: A substation Northwest of Phoenix, Arizona

Industry participants who would like to provide feedback or report transactions for delivery at these locations should email mark.callahan@platts.com and pricegroup@platts.com.

See the original announcement.

The ZEMA graph in this example demonstrates the correlation between ISO

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New England Swap Futures and Henry Hub Gas Futures. As the green line shows, the correlation is non-zero and is close to 1, meaning there is a strong correlation. This data is taken from the NYMEX Future Settlements report, and the correlation formula is from ZEMA’s formula library. Tracking the relationship between ISO and natural gas data is easy using ZEMA’s visualization and analytical tools.

Argus Removes UK OTC Base Load AssessmentsOn August 25, 2014, Argus removed numerous assessments from its Argus European Electricity publication.

For most of the assessments listed below, the next phase of the EFA contract expiry schedule was the end of all the EFA month contracts on August 22, 2014. The start of the sixth forward Gregorian contract month was on August 25, 2014. However, the “UK OTC base load volume current EFA month” code listed below continues until the end of the EFA September month, as the current month (September) is still within the existing EFA schedule.

PA Code Time Stamp Price TypeContinuous Forward

Description

PA0002670 6 1 1 UK OTC base load EFA month

PA0002670 6 2 1 UK OTC base load EFA month

PA0002670 6 8 1 UK OTC base load EFA month

PA0002697 6 1 1 UK OTC peak load EFA month

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August 2014 10

PA Code Time Stamp Price TypeContinuous Forward

Description

PA0002697 6 2 1 UK OTC peak load EFA month

PA0002818 6 4 1 UK OTC base load index EFA month

PA0002818 6 33 1 UK OTC base load index EFA month

PA0003023 6 29 1 UK OTC base load volume EFA month

PA0003023 6 34 1 UK OTC base load volume EFA month

PA0003026 6 29 0UK OTC base load volume current EFA month

See the original announcement.

NYMEX Amends 98 Electricity FuturesEffective August 18, 2014, the New York Mercantile Exchange, Inc. (NYMEX) amended the termination of trading rules for 98 electricity futures contracts for trades that are executed electronically on the CME Globex trading platform. The termination of trading schedule for open outcry trading on the NYMEX trading floor and for submission for clearing through CME ClearPort remain unchanged. These amendments were made to more clearly distinguish the contract specifications from the trading functionalities available to these contracts based on the type of futures contract (i.e., monthly, daily, etc.).

In general, day-ahead daily contracts now cease trading on CME Globex at 4:15 p.m. Chicago Time/CT on the business day prior to the contract day. Day-ahead monthly contracts cease trading on CME Globex at 4:15 p.m. CT on the last business day of the month preceding the contract month.

Real-time daily contracts cease trading on CME Globex at 11:59 p.m. local time of the associated independent system operator/regional transmission organization on the contract day. If that time is not within CME Globex regular trading hours, real-time daily contracts cease trading on CME Globex at 4:15 p.m. CT on the nearest business day on or before the contract day. For example and assuming no holidays, Sunday through Thursday real-time daily contracts will cease trading at 11:59 p.m. local time on the calendar day that is the contract day, which is technically the next business day (trade date) on CME Globex. Friday and Saturday real-time daily contracts terminate at 4:15 p.m. CT on Friday.

Real-time monthly contracts cease trading on CME Globex at 11:59 p.m. local time on the last calendar day of the month preceding the contract month. If that time is not within CME Globex regular trading hours, real-time monthly contracts cease trading on CME Globex at

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4:15 p.m. CT on the nearest business day on or before the last calendar day of the month preceding the contract month. For example and assuming no holidays, if the last calendar day of the month preceding the contract month falls on a Sunday through Thursday, a real-time monthly contract will cease trading at 11:59 p.m. local time on that day. If the last day of the month prior to the contract month falls on a Friday or Saturday, the real-time monthly contract will cease trading on CME Globex at 4:15 p.m. CT on Friday.

The subject contracts are listed for trading on CME Globex and the NYMEX trading floor, as well as for submission for clearing through CME ClearPort. The trading hours for open outcry are Monday – Friday 9:00 a.m. – 2:30 p.m. New York Time/NYT (8:00 a.m. – 1:30 p.m. CT). The hours for CME Globex and CME ClearPort are Sunday – Friday 6:00 p.m. – 5:15 p.m. NYT (5:00 p.m. – 4:15 p.m. CT) with a 45-minute break each day beginning at 5:15 p.m. NYT (4:15 p.m. CT).

To view a full list of impacted contracts, see the original announcement.

Petroleum

August 2014 12

Platts to Create M+4 Cash BFOE AssessmentOn October 1, 2014, Platts will launch a cash BFOE assessment to reflect four forward Brent monthly contracts ahead of the month of publication (M+4).

This instrument will complement Platts’s existing cash BFOE assessments, which currently reflect one, two, and three months ahead of the month of publication. Platts will also launch an exchange of futures for physical (EFP) assessment to reflect the EFP for M+4 Brent.

The new assessments will be published alongside Platts’s existing cash BFOE and EFP assessments in Platts Crude Oil Marketwire, Platts Oil Price Report, and Platts Global Alert pages 1210 and 1212.

See the original announcement.

Enhance your market analysis using real-time crude oil and petroleum product price data in ZEMA, ZE’s data management solution for oil market participants. To learn more, book a complimentary ZEMA demonstration.

Platts Launches New US Gulf Coast Clean Tanker AssessmentsOn August 1, 2014, Platts launched two new clean medium range tanker freight rate assessments for the U.S. Gulf Coast. These assessments reflect newly established supply trends of refined products out of the region, in the wake of major changes to refining capacity in the southern U.S.

The new assessments — U.S. Gulf Coast to Argentina and U.S. Gulf Coast to Brazil — will reflect strong market interest in these routes for clean medium range tankers. The new assessments reflect modern MR tonnage. Each assessment will be published on a worldscale basis to reflect how these routes are traded. Platts will also publish a dollars per metric ton value for these routes.

Further information about the assessments is provided below:

• U.S. Gulf Coast to Argentina: This assessment reflects a 38,000 mt clean MR tanker from the U.S. Gulf Coast to Argentina, and reflects the increased amount of refined products leaving the U.S. Gulf Coast. The assessment reflects loadings from Houston and New Orleans

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August 2014 13

and discharge into major Argentine ports, including Buenos Aires and La Plata.

• U.S. Gulf Coast to Brazil: This assessment reflects a 38,000 mt, clean MR tanker from the U.S. Gulf Coast to Brazil, and reflects the increased amount of refined products leaving the U.S. Gulf Coast. The assessment reflects loadings from Houston and New Orleans and discharge into Santos, Tramandai and Salvador.

These new assessments are published in Platts Clean Tankerwire and Platts Tanker Alert.

Platts has also detected interest in a further assessment reflecting the value of supply routes into northern Brazil, and will separately study the potential for this assessment.

See the original announcement.

Platts Starts 500 CST Rotterdam Barge AssessmentOn August 1, 2014 Platts launched a new assessment for 500 CST, 3.5% sulfur fuel oil barges, FOB basis Rotterdam. The new assessment is published alongside all existing Rotterdam fuel oil barge assessments, and separately from a new 500 CST bunker fuel assessment.

The specification reflected in the new assessment conforms to ISO 8217: 2010 specifications, category ISO-F, RMK 500. Specification and assessment parameters are detailed in Platts’s Europe and Africa Refined Oil Products Methodology and Specifications Guide.

The assessment reflects the value of barges at 16:30 London time, for oil loading 3 to 15 days forward from Monday-Tuesday, and 5 to 15 days forward from Wednesday-Friday. During U.K. public holidays this schedule and time may change, and Platts will publish changes to its typical publishing schedule when the need arises. The assessment will reflect a barge size of 2,000 mt.

Platts will publish bids, offers and interest to trade RMK 500 CST barges, FOB basis Rotterdam, in front-end, middle- window and back-end loading ranges (FE, MW, and BE, respectively), as in Platts’s other European fuel oil barge market on close assessment processes.

See the original announcement.

ZEMA combines strengths in oil market data collection, visualization, and analysis, equipping traders and ana-lysts to make informed business decisions. To learn more, book a complimentary ZEMA demonstration.

Argus Adds Calendar Month Average Values to Crude PublicationOn October 1, 2014, Argus will add calendar month average values for the daily refinery gate value and netback values introduced on September 1 to its Argus Crude publication. These series will have a continuous forward rate of 1.

To view a complete list of new values, see the original announcement.

Argus Creates New Series in Marine Fuels PublicationOn September 2, 2014, Argus added new codes to its Argus Marine Fuels publication.

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New series were added to the dmarinef files in the DAMarineF folder of server ftp.argusmedia.com.

New series have a time stamp of 26 (excluding Panama Canal assessments, which have a time stamp of 2); are price types 1, 2, and 8; and have a continuous forward rate of 0.

PA Code DescriptionPA0013982 Fuel oil bunker HS 380cst dob Ust-Luga (anchorage)PA0013983 Fuel oil bunker HS 180cst dob Ust-Luga (anchorage)PA0013986 Fuel oil bunker HS 380cst dob Ust-Luga (berth)PA0013987 Fuel oil bunker HS 180cst dob Ust-Luga (berth)PA0013992 Gasoil bunker MGO dob Ust-Luga (anchorage)PA0013993 Gasoil bunker MGO dob Ust-Luga (berth)PA0015037 Gasoil bunker Panama Canal 0.1% sulphur

See the original announcement.

ZEMA collects a range of Argus crude assessment data, including data from the European Crude (Spot Prices) record and the Argus Crude record. To learn more, visit http://www.ze.com/the-zema-solutions/.

Argus Lists New Assessments in Russian Motor Fuels PublicationOn September 1, 2014, Argus introduced new Jet/Kerosine fca Orsk assessments and Orsk-Kazakhstan indexes. The following information will appear in the DAMTR data module in the /DAMTR folder of server ftp.argusmedia.com:

PA CodeTime Stamp

Price Type

Continuous Forward

Description

PA0015000 26 1 0 Jet/Kerosine fca Orsk

PA0015000 26 2 0 Jet/Kerosine fca Orsk

PA0015001 0 4 0 Jet Orks-Kazakhstan (Astana) del price index

PA0015002 0 4 0 Jet Orks-Kazakhstan (Alma-Ata) del price index

PA0015003 0 4 0 Jet Orks-Kazakhstan (Aktobe) del price index

PA0015004 0 4 0 Jet Orks-Kazakhstan (Atyrau) del price index

PA0015005 0 4 0Jet Orsk-Kazakhstan (Karaganda) del price index

PA0015006 0 4 0 Jet Orsk-Kazakhstan (Uralsk) del price index

PA0015007 0 4 0Jet Orsk-Kazakhstan (Ust-Kamenogorsk) del price index

See the original announcement.

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August 2014 15

Argus Adds Refinery Gate Values and Netbacks to Crude PublicationOn September 1, 2014, Argus added a range of new refinery gate values and netbacks for both simple and complex models to selected crude grades for North Western Europe, Asia, and the U.S. Gulf Coast. New assessments were added to the DLC.CSV files in the /DCRDEEU folder of server ftp.argusmedia.com.

To view a complete list of new assessments, see the original announcement.

IHS Introduces New Drilling and Completions SolutionOn August 19, 2014, IHS Inc. (IHS) announced that it has launched the IHS Drilling and Completions Solution, an operator-only membership service designed to provide oil and gas operators (especially drilling engineering teams) with current and historical drilling data, as well as the performance benchmarking analysis derived from that data.

The IHS Drilling and Completions Solution is organized into four regions of coverage that model the organizational structure of many operators, including the Rocky Mountain/West group, the Midcontinent Southeast group, the Northeast group, and the Gulf of Mexico group. This offering employs a data analysis software tool that integrates two existing services – the IHS Offset Drilling Data and IHS Drilling Performance Benchmarking solutions. The solution’s database includes more than 26,000 historical, public offset well records with drilling data (mud, chemicals, BHA) and operational event information. 

The converged data accounts for more than 9,000 operator-provided performance benchmarked wells.

See the original announcement.

ZEMA, ZE’s data management solution for oil market participants, collects over 650 oil records on a daily basis. Market participants can then transform this data into market intelligence using ZEMA’s library of analytic formulas. To learn more, visit http://www.ze.com/the-zema-suite/.

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August 2014 16

Platts to Remove Q1, Q2 Benzene Assessments and Toluene AssessmentsOn January 2, 2015, Platts will discontinue its Q1 and Q2 CIF ARA benzene assessments and its T2 FOB ARA nitration-grade toluene assessment because of a lack of liquidity in these markets. These prices can be found on Platts Petrochemical Alert and in the Europe and Americas Petrochemicalscan.

Platts will continue to assess TDI-grade toluene basis FOB ARA in Europe.

The following assessments will be affected:

Code Monthly Average Weekly AverageBenzene CIF ARA Q1 AAIBN00 AAIBO00 Benzene CIF ARA Q2 AAIBP00 AAIBQ00Toluene T2 FOB ARA PHAFW00 HBFM03 PHAFV04Toluene T2 FOB ARA M1 AAXOK00 AAXOK03 AAXOK04Toluene T2 FOB ARA M2 AAXOL00 AAXOL03 AAXOL04

See the original announcement.

Platts to Cease Publishing Middle East M2 LPG DifferentialsOn September 1, 2014, Platts discontinued its assessments of physical market premiums for refrigerated propane and butane cargoes loading in the Middle East LPG market in the second month ahead due to changing market conditions.

Platts continues to assess spot premiums for the month ahead and the spot market, which is 20-40 days ahead. All premiums reflect the spot value of refrigerated LPG cargoes versus the Saudi Aramco contract price that prevails for the loading period.

Platts has been assessing second-month propane and butane cash differentials since December 2002. Since that time, spot market activity revolving around the second month forward has dipped, and trading in far-forward cargoes is no longer typical in the Persian Gulf.

These assessments are published on Platts Global Alert, LP Gaswire, and in the Platts price assessment database under symbols AALAM00 (refrigerated propane M2 cash differential) and AALAN00 (refrigerated butane M2 cash differential).

See the original announcement.

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August 2014 17

Platts Discontinues Urals CFD OutrightsOn August 1, 2014, Platts ceased publishing outright values associated with Northwest European and Mediterranean Urals CFD markets. Platts discontinued these values, which are generated by applying assessed CFD values to Dated Brent, following feedback from the market that providing these outright values was not valuable.

These markets trade as differentials, and Platts will continue to publish assessments for those differentials in both the Northwest European and Mediterranean Urals CFD markets. These assessments will continue to be published on Platts Global Alert page 1616 and 1618, respectively, and in Platts Crude Oil Marketwire.

See the original announcement.

NYMEX Delists the NY ULSD vs. Low Sulfur Gasoil ContractOn July 28, 2014, NYMEX delisted the following product from CME Globex, CME ClearPort, and the NYMEX trading floor. There is currently no open interest in this product.

Product Name Clearing Code GLOBEX CodeNY ULSD vs. Low Sulfur Gasoil Contract SLS SLS

See the original announcement.

Platts to Assess Minas, Tapis Crude Using Full CargoesOn December 1, 2014, Platts will begin to base its assessments on full cargoes for Malaysia’s Tapis crude oil and Indonesia’s Minas crude oil. Through this proposed change, Platts will discontinue the use of the partials mechanism to assess Minas and Tapis. Instead, Platts will continue to publish bids, offers, and transactions for full parcels of either grade.

Platts proposes to amend the cargo size reflected in these grades to 100,000 barrels for Minas (down from 200,000 barrels currently) and 300,000 barrels for Tapis (down from 450,000 barrels currently), in line with existing trade in these grades.

These proposed changes reflect evolving dynamics in Southeast Asia’s crude oil markets. Crude oil available for trade in the spot market is generally trading in smaller physical loading sizes.

Currently the partials mechanism for Minas leads to a convergence of a 200,000 barrel cargo of the grade following the accumulation of 8 partials of 25,000 barrels from a single seller. The partials mechanism for Tapis leads to the convergence of a cargo of 450,000 barrels following the accumulation of 18 partials of 25,000 barrels from a single seller.

See the original announcement.

Petroleum

August 2014 18

NYMEX Permits Block Trading in Brent Crude Oil Weekly OptionsOn August 18, 2014, NYMEX began to permit block trading for the following product:

Product Title Block Trade Minimum ThresholdBrent Crude Oil Weekly Options 10 contracts

See the original announcement.

The ZEMA graph below shows a Brent-WTI spread from May 2014–August 2014 using future settlements pricing data. The data pictured is from NYMEX Future Settlements; the spread is calculated by subtracting WTI from Brent using a ZEMA formula. The intu-itive ZEMA solution enables users to compare forecasting models with actual prices to help improve upon forecasting methods.

Nat Gas

August 2014 19

PEGAS Introduces Trading in Gas Spot Contracts for British National Balancing PointOn October 15, 2014, PEGAS will introduce trading in gas spot contracts for the British National Balancing Point (NBP) under the rulebook of EEX. Market participants will have access to the NBP products via the existing PEGAS platform. Trading in the NBP spot contracts will be available 24/7 according to the existing offering on the PEGAS Spot Market.

For the new products, participants will be exempt from trading, clearing, and delivery fees for six months from October 15, 2014 onwards.

The following products will be available for the NBP market area:

• NBP Natural Gas Within Day Contracts • NBP Natural Gas Day Ahead Contracts • NBP Natural Gas Saturday Contracts • NBP Natural Gas Sunday Contracts

• NBP Natural Gas Weekend Contracts • NBP Natural Gas Individual Days

All contracts will be traded in GBP pence per therm. The minimum price tick will be 0.001 GBP pence/therm, and the minimum lot size for all spot contracts will be 1,000 therm/day.

The subject of each contract is the delivery of natural gas with a constant output of 1,000 therm/day (≈ 29.3071 MWh/day) from 7:00 a.m. CET (6:00 a.m. U.K. time) on each delivery day of the delivery period until 7:00 a.m. CET (6:00 a.m. U.K. time) on the following calendar day. Trading ends 3 hours prior to the beginning of the delivery period.

At a later stage, PEGAS will launch spot contracts for the Belgian hub Zeebrugge Beach (ZEE), as well as the associated location spread between ZEE and NBP.

See the original announcement.

ZEMA’s advanced data collection, validation, and dash-board reporting functionalities help natural gas market participants gain enhanced business intelligence. To learn more, book a complimentary ZEMA demonstration.

NGX and Alliance Pipeline Launch Services at New US Trading HubOn July 28, 2014, NGX and Alliance Pipeline announced the addition of the Alliance Chicago Exchange market hub (APC-ACE) as a cleared trading point on NGX.

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August 2014 20

The service offers natural gas clearing and trading at the APC-ACE location via NGX, which is a wholly-owned subsidiary of TMX Group that offers trading and clearing services for natural gas, crude oil, and electricity contacts.

See the original announcement.

The ZEMA graph below shows the prices of the top six major U.S. natural gas hubs and their respective future settlements pricing. The data pictured is from NYMEX Future Settlements; it was transformed in ZEMA’s formula library, where each hub’s price was added to the benchmark Henry Hub. ZEMA’s powerful visualization functionalities enable analysts to quickly compare hub prices.

EEX to Start Trade Registration Service for Futures on the Brent 901 FormulaOn September 8, 2014, the European Energy Exchange (EEX), together with its clearing house, European Commodity Clearing (ECC), will introduce a trade registration service for futures on the Brent 901 formula.

In this context, the Argus Brent 901 Index, converted to Euro/MWh, will form the underlying settlement price for new futures. This index is a delayed nine-month average of Argus price assessments for North Sea Crude. The index is published daily by the energy and commodity information service provider Argus Media. The methodology used to calculate the Argus Brent

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901 Index can be found at the Argus website http://www.argusmedia.com/ Methodology-and-Reference/ under “Argus European Natural Gas.”

The Brent 901 formula is widely used in pricing long-term gas supply contracts, especially for pricing the Italian energy market.

See the original announcement.

NYMEX Lists New Natural Gas Weekly Financial OptionOn September 8, 2014, the New York Mercantile Exchange (NYMEX) will list a new natural gas weekly financial option contract for trade on the NYMEX trading floor and CME Globex. This contract will also be available for submission for clearing through CME ClearPort.

Relevant information is included below:

TitleCommodity Code

Rule Chapter First Listing Listing PeriodContract Size

Natural Gas Weekly Financial Option

LN1-LN5 1006

September 12, September 19, September 26, October 3

Four weekly expirations

10,000 MMBTU

See the original announcement.

To receive the latest updates on the U.S. natural gas boom, use ZEMA, ZE’s data management solution for natural gas market participants. ZEMA collects data from over 600 natural gas records on a daily basis. ZEMA users can then transform this data into market intelligence using ZEMA’s extensive library of analytic formulas. To learn more, visit http://www.ze.com/the zema-suite/.

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August 2014 22

NYMEX Removes Three Texas Gas SL FuturesOn August 11, 2014, NYMEX delisted three Texas Gas SL futures contracts, as set out in the table below. The contracts were listed for trading on the NYMEX trading floor and CME Globex; they were available for submission for clearing through CME ClearPort. There was no open interest in these contracts.

Relevant information has been removed from the NYMEX Rulebook.

Product Name Clearing Code Globex Code Rulebook ChapterTexas Gas, Zone SL Natural Gas (Platts Gas Daily) Swing Futures

J7 TJ7 679

Texas Gas, Zone SL Natural Gas (Platts IFERC) Basis Futures

TB TBN 772

Texas Gas, Zone SL Natural Gas (Platts Gas Daily/Platts IFERC) Index Futures

S7 S7 834

See the original announcement.

NYMEX Permits Block Trading in Natural Gas Weekly Financial OptionsOn September 8, 2014, NYMEX will begin to permit block trading for the following product:

Product Title Block Trade Minimum ThresholdNatural Gas Weekly Financial Options 10 contracts

See the original announcement.

Coal

August 2014 23

Platts Introduces Daily Coal Switching Price Indicator for UK and NetherlandsOn August 1, 2014, Platts began publishing a daily coal switching price indicator (CSPI) for the U.K. and the Netherlands that calculates the threshold needed for gas prices to be more competitive than coal prices as input fuel in power generation.

The CSPIs will be used for the month-ahead, quarter-ahead, and year-ahead periods in each market and will include both 45% and 50% high heating value (HHV) gas-fired plant efficiency. The indicators are calculated using Platts’s corresponding assessments for coal and EUAs, which are currently published in European Power Daily and Coal Trader International. The coal switching price indicators for 50% efficiency will be published in European Power Daily and European Gas Daily, while price indicators for both 45% and 50% efficiency will be published on European Power Alert and in Platts Market Data category EM.

See the original announcement.

To learn how many LNG industry participants use ZEMA to enhance their data collection, validation, and visualization processes, book a complimentary ZEMA demonstration.

Platts Launches CFR India 5,500 NAR Thermal Coal PricesOn August 1, 2014, Platts began publishing a daily spot price assessment for thermal coal delivered to East and West Coast Indian ports with a calorific value of 5,500 kcal/kg on a net- as-received (NAR) basis. The new assess-ments will take into account thermal coal trades in the spot market in a 30-60 day forward window on a cost and freight and delivered to India basis.

The standard specification for the assessment, named CFR India 5,500 NAR, is as follows: a gearless Panamax shipment of 75,000 mt, a standard calorific value of 5,500 kcal/kg on a NAR basis with typical total sulfur content of 0.80% as received, typical ash of 20% as received, and typical total moisture of 8.5% as received.

Platts considers as relevant to the assessment process coals of a merchantable quality of 5,300-5,700 kcal/kg NAR, sulfur up to 1%, ash content up to 23%, and total moisture up to 20%, normalized to the standard specifications.

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For CFR India, Platts takes into consideration cargoes for discharge at terminals in both the East and West Coasts of India but normalized to Krishnapatnam port on the East Coast and Mundra port on the West Coast.

The new symbols are as follows:

• CIECI00-Thermal coal CFR East Coast India 5500 kcal/kg NAR • CIWCI00-Thermal coal CFR West Coast India 5500 kcal/kg NAR

See the original announcement.

ZEMA, a market data management solution for coal industry participants, collects real-time data about commodity prices and transforms this into sophisticated forward curve analyses. To learn more, book a complimentary ZEMA demonstration.

New Coal Daily Differential Assessment to Be Added to Argus/McCloskey Coal Price IndexOn September 5, 2014, Argus will introduce a new daily differential assessment in its Argus/McCloskey Coal Price Index publication and data module. The following information will appear in the CoalAPI module in the dcm files within the DATA\DAMCOAL folder of server ftp.argusmedia.com.

PA Code Time Stamp Price Type Continuous Forward

Description

PA0012924 0 49 0 Coal API 3 index (fob Richards Bay 5500)

See the original announcement.

ICAP Energy Introduces Global Coking Coal DeskOn August 21, 2014, ICAP Energy announced that it has launched a global coking coal desk. ICAP claimed in its related press release that coking coal derivatives have grown in significance due to a greater need for price risk management in the highly volatile physical coking coal industry. Physical players have migrated away from longer-term fixed price contract terms in favor of more spot-based, index linked contracts.

ICAP Energy has also completed its first coking coal trade between a European-based bank and an international trading company based in Singapore. The contract was cleared via CME.

See the original announcement.

ZEMA combines strengths in coal market data collection, visualization, and analysis, equipping traders and analysts to make informed business decisions. To learn more, book a complimentary ZEMA demonstration.

The ZEMA graph in this example displays NYMEX Central Appalachian Coal Futures (CAPP) with the Western price of Western Rail PRB after adding CAPP to the swap price. ZEMA’s

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extensive data library and collection of analytic formulas help traders and brokers easily visualize trends like the one displayed.

FIS Brokers First Trades on SGX CFR China and FOB Australia Coking Coal ContractsOn August 4, 2014, Freight Investor Services (FIS) announced that it has executed the first swaps on two new premium hard coking coal contracts.

The two new cleared contracts, FOB Australia and CFR China, are based on TSI assessments. FIS brokered the first coking coal trade, which was cleared through CME on the Platts assessment.

The first trade on the China CFR trade was concluded for the September contract at $122.5 and the first FOB trade at $118.5 for the same period. Both were brokered by FIS between Concord Fortune and an undisclosed counterparty.

FIS noted on their site that seaborne coking coal prices have historically been based on long-term, bilateral contract prices negotiated annually or quarterly. The move away from long-term contract pricing and towards index-linked deals in the iron ore market has resulted in the coking coal market following suit. This movement in the coking coal market has created a similar opportunity to hedge price risk using cleared swaps.

See the original announcement.

ZEMA’s coal market data management solution easily integrates relevant information with a wide range of CTRM and ETRM systems. To learn more, book a complimentary ZEMA demonstration.

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August 2014 26

Platts to Remove CFR India 5,900 GAR PricesOn September 19, 2014, Platts will discontinue its CFR India East 5,900 GAR and CFR India West 5,900 GAR prices. Affected symbols include the following:

• TCAKN00 - CFR India West 5,900 GAR • TCAKH00 - CFR India East 5,900 GAR

See the original announcement.

Platts Discontinues Monthly Coking Coal 90-Day Forward AssessmentsOn August 29, 2014, Platts ceased publishing monthly coking coal 90-day forward price assessments. These assessments were published in Coal Trader International. These assessments have been superseded by the onset and acceptance of Platts’s daily metallurgical coal assessments.

Relevant data series remain available as market data.

To view a full list of impacted series, see the original announcement.

NYMEX Delists Australian Coking Coal FuturesOn August 11, 2014, the New York Mercantile Exchange, Inc. (NYMEX) delisted the Australian Coking Coal (Platts) futures and Australian Coking Coal (Argus) Low Vol futures contracts as set out in the table below. These contracts were listed for trading on the NYMEX trading floor and were available for submission for clearing on CME ClearPort. There was no open interest in these contracts.

Relevant information has been removed from the NYMEX Rulebook.

Product NameCME Globex Code/Clearing Code

NYMEX Rulebook Chapter Number

Australian Coking Coal (Platts) Futures ACL 971

Australian Coking Coal (Argus) Low Vol Futures ACR 1110

See the original announcement.

Softs and Metals

August 2014 27

Platts Begins Publishing Daily London Silver PriceOn August 15, 2014, Platts began publishing the daily London silver price in dollars/troy ounce in all publications and services under the new symbol MMAXD00. This new dollars/oz silver price is also available as a full weekly average from August 22, 2014, under symbol MMAXD01. The first full monthly average will be for September, published September 30, 2014, under symbol MMAXD02.

Platts will also continue to publish the existing London Silver Fix series in cents/troy ounce and pence/troy ounce under symbols MMACF10 and MMACE10, respectively. The weekly and monthly averages will also continue to be published, including for the week ending August 15, 2014, and month of August. Platts is continuing to publish these prices to ensure continuity for the data series through this transition period.

As previously announced, effective August 15, 2014, the Chicago Mercantile

Exchange (CME) and Thomson Reuters began administering and publishing a daily reference price reflecting the supply and demand balance for silver bullion, location London, which is now referred to as the London Silver Price. The London Bullion Market Association approved the new price and the International Swaps & Derivative Association now recognizes the new price as an alternative to the Silver Fix in contracts that reference the Silver Fix.

See the original announcement.

ZEMA’s data collection, validation, and storage capabilities enable metals market participants to feed downstream systems with real-time data about silver and gold prices. To learn more, book a complimentary ZEMA demonstration.

Platts Starts CIF NWE Industrial Wood Pellet AssessmentOn August 15, 2014, Platts launched a weekly spot market price assessment for industrial wood pellets delivered to Northwest Europe with a net calorific value of 17 GJ/metric ton. The new assessment is published in Coal Trader International, European Power Daily, and Power in Europe.

Platts reflects the value of typical shipments of pellets delivered to CIF Northwest Europe, published weekly. Prices are assessed on a

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August 2014 28

market on close basis at 5 p.m. London time every Friday or, in the event of a public holiday, on the nearest preceding business day.

Industrial I2 wood pellets with the following specifications are included in the assessment process:

• A standard calorific value of 17 GJ/mt on a net-as-received basis with typical sulfur content of 0.1% as received and typical ash of 1% as received from any origin.

The assessment reflects the price in $/metric ton of wood pellets for delivery 7-45 days forward from the date of publication and rolls forward each week. The new symbol is “IWPNW00 – Industrial wood pellets CIF NW Europe 17 GJ/metric ton.”

Effective Friday, August 15, 2014, Platts also began publishing weekly U.K. wood pellet spreads, which are indicative prices giving the average difference between the cost of wood pellets and the equivalent price of U.K. electricity on any given day at fuel efficiencies of 30%, 35%, and 40%.

The pellet spreads are based on CIF Northwest Europe 45-day wood pellet assessments, the equivalent prompt U.K. power assessment, and the U.K. Levy Exemption Certificate (LEC) and Renewable Obligation Certificate (ROC) subsidy bandings for biomass power generation.

See the original announcement.

Argus Adds New Argentine SME Upriver Price AssessmentsOn August 29, 2014, Argus added end-of-month averages for its Argentine SME upriver assessment. These averages are included in the Argus Americas Biofuels publication. The following codes will be added to the /DUSEthanol folder of the server ftp.argusmedia.com.

PA Code Time Stamp Price TypeContinuous Forward

Description

PA0008774 2 1 1Biodiesel SME Argentina fob upriver average month

PA0008774 2 2 1Biodiesel SME Argentina fob upriver average month

See the original announcement.

ZEMA collects over 4,000 reports from more than 400 data providers—using the solution, biofuel market participants can easily assemble a customized data warehouse that integrates with a wide range of downstream systems. To learn more, book a complimentary ZEMA demonstration.

Platts Discontinues NWE Non-RED SME Biodiesel AssessmentOn May 30, 2015, Platts will discontinue its assessment for Northwest European SME biodiesel holding no proof of sustainability under the EU’s Renewable Energy Directive.

This assessment corresponds with oracle code AAUCB00; it is published in the Platts database and on Biofuelscan. The weekly (AAUCB03) and monthly (AAUCB04) averages will also be discontinued.

See the original announcement.

Platts to Cease Publishing Weekly FOB China Tungsten PricesOn December 31, 2014, Platts will cease publishing the weekly FOB China ferrotungsten price (MMAHL00) and the weekly FOB China tungsten APT price (MMAFH00).

Spot export activity for ferrotungsten has significantly fallen due to an export duty of 20%, and APT trade has been impacted as it is the main raw material for ferrotungsten production.

Chinese domestic production has also reduced due to government regulations which limit export licenses, export quotas, mining, and explorations. Preliminary market research shows that the Chinese prices are no longer representative in the industry.

The final values for both these prices will be published on December 18, 2014.

See the original announcement.

Platts to Remove Daily Kuala Lumpur Tin PriceOn December 31, 2014, Platts will discontinue its daily Kuala Lumpur tin price (MMAAY10). This price is not a Platts assessment, but a third party exchange price obtained from the Kuala Lumpur tin market.

See the original announcement.

Platts to Stop Publishing In-Warehouse Singapore Tin PremiumOn December 31, 2014, Platts will cease publishing the daily in-warehouse Singapore tin premium (AASJB00). Preliminary market research shows that this premium is no longer representative in the industry.

With the discontinuation of the in-warehouse Singapore tin premium, Platts will also cease to publish the daily in-warehouse Singapore fixed price equivalent for tin (AASJC00), which is an automated price based on the current LME tin price plus the assessed tin premium.

See the original announcement.

Platts to Discontinue Daily In-Warehouse Singapore Lead PremiumOn December 31, 2014, Platts will discontinue its daily in-warehouse Singapore lead premium (MMANG00). Preliminary market research shows that this premium is no longer representative in the industry, due to a lack of market liquidity and interest.

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August 2014 29

With the discontinuation of the in-warehouse Singapore lead premium, Platts will also cease to publish the daily in-warehouse Singapore fixed price equivalent for lead (MMPSW00), which is an automated price based on the current LME lead price plus the assessed lead premium.

Should the discontinuations be finalized after further industry consultation, the final publication of these values will be on December 31, 2014.

See the original announcement.

Platts to Cease Publishing FOB China Antimony PriceOn December 31, 2014, Platts will cease publishing its weekly FOB China antimony price (MMACZ00).

Preliminary market research shows that this price is no longer representative in the industry due to a lack of liquidity and market interest. Chinese exports have also fallen due to reduced demand, and Chinese production has lowered significantly due to government regulations which have limited mining and explorations.

Should the discontinuation be finalized after further industry consultation, the final publication of this price will be on December 18, 2014.

See the original announcement.

Platts to Take Out Weekly CIF Japan Indium PriceOn December 31, 2014, Platts will discontinue its weekly CIF Japan indium price (AAVSH00) due to a lack of spot market liquidity.

Should the discontinuation be finalized after further industry consultation, the final publication of this price will be on December 23, 2014.

See the original announcement.

Platts to Refrain from Publishing East Asia Steel Beam, Bar AssessmentsIn December 2014, Platts will discontinue its monthly price assessment of H-beam CFR East Asia (SB01114) and its monthly price assessment of Merchant Bar CFR East Asia (SB01165).

Wide product specifications, low liquidity, and local pricing have made these pan- regional assessments difficult to maintain as a reflection of regional value.

Should the discontinuation be finalized after further industry consultation, the final publication of these price assessments will be during the last week of December 2014.

See the original announcement.

Platts to Cease Publishing East Asian Rebar, Rod AssessmentsIn December 2014, Platts will discontinue publication of the weekly price assessment of Rebar CFR East Asia (symbol SB01195) and the monthly price assessment of Wire Rod Mesh Quality CFR East Asia (SB01245).

China has emerged as a major exporter of rebar and wire rod to the region in recent years. Platts is seeking to refocus its market reporting on FOB China price assessments for these steel products.

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Should the discontinuation be finalized after further industry consultation, the final publication of these price assessments will be during the last week of December 2014.

See the original announcement.

Platts to Discontinue East Asian Flat Steel PricesIn December 2014, Platts will discontinue publication of the following price assessments for steel flat products in the East Asian market:

• Weekly assessment of Hot Rolled Coil CFR East Asia (symbol SB01142)

• Monthly assessment of Cold Rolled Coil CFR East Asia (SB01084)

• Monthly assessment of Hot-Dip Galvanized CFR East Asia (SB01120)

• Monthly Plate A36 CFR East Asia (SB01176)

China has emerged as a major exporter for HRC, CRC, HDG, and plate to the region in recent years. Platts is seeking to refocus its market reporting on FOB China price assessments for these products.

Should the discontinuation be finalized after further industry consultation, the final publication of these price assessments will be during the last week of December 2014.

See the original announcement.

Platts to Halt China Domestic Stainless CR 201 PriceOn December 1, 2014, Platts will discontinue the following SBB price series:

• SB01053 Stainless Steel /CR 201 2B 1-2mm/China domestic Foshan (incl 17% vat) RMB/t monthly

Platts will remove this series due to a lack of trading in the spot market and limited interest in it as a market reference.

See the original announcement.

Platts to Stop China Domestic Pig Iron Price AssessmentOn December 1, 2014, Platts will discontinue its monthly China domestic pig iron price assessment (SB01173). The Hebei-based assessment in yuan is being discontinued due to the lack of spot trading of this particular product in the region.

See the original announcement.

Argus Removes Non-RED Assessments from Biofuels PublicationOn September 30, 2014, Argus will remove many non-RED (Renewable Energy Directive) assessments from its Argus Biofuels publication. Data codes will stop in the Dbio files in the DBIOFUELS folder of server ftp.argusmedia.com.

To view a complete list of affected assessments, see the original announcement.

COMEX Delists ME Alcoa Aluminum BrandOn August 20, 2014, the Commodity Exchange, Inc. (COMEX) suspended the registration (warranting) of the ME Alcoa aluminum brand onto COMEX warrants for

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August 2014 31

delivery against the Aluminum futures contract.  As such, any unwarranted aluminum of ME Alcoa brand is no longer deemed eligible.

Any registered (warranted) ME Alcoa aluminum or any ME Alcoa aluminum placed on warrant through Wednesday, August 20, 2014 continued to be deliverable against the COMEX Aluminum futures contract until the warrant was cancelled. Once the warrant was cancelled, the material could not be rewarranted.

The Commodity Futures Trading Commission (CFTC) was notified of this brand suspension and delisting during the week of August 25, 2014.

See the original announcement.

COMEX Removes E-Mini Silver Futures ContractOn August 4, 2014, COMEX delisted the e-mini silver futures contract described below. As a result of the delisting, information regarding this contract has been deleted from related product rule chapters; position limits in the “Position Limit, Position Accountability and Reportable Level Table” located in the “Interpretations and Special Notices” section of Chapter 5 (“Trading Qualifications and Practices”) of the COMEX Rulebook; and the CME Globex non-reviewable ranges located in Rule 588.H of the COMEX Rulebook.

Product Name CME Globex Code/Clearing Code COMEX Rulebook Chapter NumberE-mini Silver Futures XSN/6Q 408

See the original announcement.

CME Stops 17 Livestock, Dairy, and Lumber OptionsOn August 4, 2014, the Chicago Mercantile Exchange (CME) delisted 17 flexible options contracts. These contracts were listed for trading on the CME trading floor. There was no open interest in these contracts, and respective product rules, terms, and conditions have been removed from the exchange rulebook.

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Softs and Metals

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Product Name Clearing Code CME RulesFeeder Cattle-American style flex 8F 102A30 to 102A38Feeder Cattle-European flex 9F 102A30 to 102A38Feeder Cattle-Long dated flex 9F1 102A30 to 102A38Lean Hogs-American style flex 8H 152A30 to 152A38Lean Hogs-European style flex 9H 152A30 to 152A38Lean Hogs-Long dated flex 9H1 152A30 to 152A38Live Cattle-American style flex 8K 101A30 to 101A38Live Cattle-European style flex 9K 101A30 to 101A38Live Cattle-Long dated flex 9K1 101A30 to 101A38Class 3 Milk-American style flex 8M 52A30 to 52A38Class 3 Milk-American style flex 9M 52A30 to 52A38Class 3 Milk-Long dated flex 9M1 52A30 to 52A38Class 4 Milk-American style flex 8X 55A30 to 55A38Class 4 Milk-European style flex 9X 55A30 to 55A38Class 4 Milk-Long dated flex 9X1 55A30 to 55A38Butter flex None 56A30 to 56A38Lumber flex None 201A30 to 201A38

See the original announcement.

ZEMA can be used to transform complex CME softs data into easy-to-understand visualizations. For example, the ZEMA graph below represents price changes for CME Oats Future Settlements on a quarterly basis into 2016. ZEMA allows visualization of softs data in the form of stacked bars, making prices easier to see than when they are represented via lines and regular bars.

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Eurex Temporarily Suspends Trading in Silver Derivatives with Codes FSFX and OSFXOn July 25, 2014, the Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG decided with immediate effect to suspend trading until further notice in precious metals derivatives on silver with product codes FSFX and OSFX.

Orderly exchange trading in these precious metals derivatives appears to be temporarily at risk, since silver price fixing after August 14, 2014 began to no longer be conducted by London Silver Market Fixing Limited. Therefore, orderly price determination in precious metals derivatives is endangered.

The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG will decide, when appropriate, if trading in these precious metal derivatives can be resumed. Trading may resume if a successor organization will again conduct a silver price fixing.

See the original announcement.

New Equity Options Introduced on Euronext N.V. On August 28, 2014, Euronext introduced trading in equity options on Euronext N.V. shares on the Amsterdam derivatives market.

The new options are listed in the spotlight options section, Euronext’s segment dedicated to the development of new option classes requested by market participants. Spotlight Options give visibility to underlying assets such as newly listed stocks, SMEs, and/or assets with notable market events or activity. Through a combination of liquidity provider support and promotion by sponsoring brokers, underlying assets are put in the spotlight with short-term maturities options of one, two, and three months.

These options were listed in the Amsterdam Spotlight options segment following the successful IPO of Euronext N.V. on June 20. The American-style options (ticker symbol: ENX) expire on the third Friday of the contract month and have initial maturities of one, two, and three months. Each option

represents 100 shares in Euronext, and these options are cleared via LCH.Clearnet SA. The liquidity in the Euronext options is supported by Susquehanna International Securities Limited.

See the original announcement.

Finance market participants can easily align derivatives data alongside news updates in ZEMA’s dashboard reporting tool to gain an enhanced market perspective. To learn more, book a complimentary ZEMA demonstration.

ISDA Publishes 2014 Credit Derivatives Definitions ProtocolOn August 21, 2014, the International Swaps and Derivatives Association, Inc. (ISDA) announced the launch of the ISDA 2014 Credit Derivatives Definitions Protocol.  

The Protocol is part of the implementation process for the 2014 ISDA Credit Derivatives Definitions, which ISDA published in February 2014. The 2014 Definitions are an updated and revised version of the 2003 ISDA Credit Derivatives Definitions, a document that contains the basic terms used in the documentation of most credit derivatives transactions. 

The ISDA noted that the Protocol is designed to enable market participants to apply the

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2014 Definitions to certain existing credit derivative transactions, thereby eliminating distinctions between those transactions and new transactions entered into on the 2014 Definitions. By adhering to the Protocol, market participants agree to amend transactions within the scope of the Protocol with all other adhering parties to incorporate the 2014 Definitions into the documentation for those transactions in place of the 2003 Definitions.

The adherence period for the Protocol is now open and will run until September 12, 2014. The documentation changes set out in the Protocol will take effect on September 22, 2014 when trading using the new Definitions is scheduled to begin.

The Protocol is open to ISDA members and non-members alike. The text of the Protocol is available on the Protocol Management section of ISDA’s website.

See the original announcement.

IFC Creates $2.5 Billion Rupee Financing Program to Strengthen India’s Capital MarketsOn August 20, 2014, IFC, a member of the World Bank Group, launched a $2.5 billion rupee financing program to strengthen capital markets and support infrastructure development in India.

Under the program, IFC will use a combination of rupee-denominated bonds and swaps to raise local-currency financing of up to $2.5 billion, or INR 15,000 crore over the next five years. Proceeds from the program will be used for infrastructure investments in India.

Last year, IFC issued a $1 billion offshore global bond program linked to the rupee exchange rate. Under the program, IFC offered six separate issuances between November 2013 and April 2014; four with maturities of three years, one of five years, and the final tranche of seven years. This set a benchmark for different tenors in the markets and extended the offshore rupee yield curve from less than three years to seven.

In FY14, IFC noted that it invested $1.2 billion in India to achieve strategic pri-orities of providing counter-cyclical support to infrastructure, financial inclusion, and access to quality and affordable healthcare to the under-served.

See the original announcement.

Keep track of developing economies using ZEMA, ZE’s data management solution for energy and commodities market participants. ZEMA’s enhanced data collection, analytic, and integration capabilities will help you receive up-to-date market information and easily transform it into shareable industry analysis. To learn more, visit http://www.ze.com/the-zema-solutions/.

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Exegy, TMX Datalinx, and FIF Launch MarketDataPeaks Service in CanadaOn August 18, 2014, Exegy Inc., the market data appliance company, TMX Datalinx, the information services division of TMX Group, and the Financial Information Forum (FIF) launched the first Canadian website to track real-time market data messaging rates at no charge for Canadian markets: MarketDataPeaks.ca.

MarketDataPeaks.ca provides a real-time, minute-by-minute account of the aggregated volume of market data messages across major Canadian exchanges. The site highlights the peaks from the current day as well as historic peaks. MarketDataPeaks.ca also features the total number of messages that occur simultaneously in any given second across all live data feeds, including the Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Alpha, Chi-X Canada, Canadian Securities Exchange, and Omega ATS. The graph displays the highest one-second peak that occurs in each minute and automatically updates every minute.

Historic statistics from Marketdatapeaks.ca are captured and included in FIF’s capacity statistics as part of the organization’s efforts to address issues that impact financial technology operations and development in light of rapid changes occurring in the marketplace.

See the original announcement.

ZEMA can collect data as soon as it is posted by any source, including MarketDataPeaks.ca. To learn how ZEMA can make your data collection, aggregation, validation, and analysis faster and easier, visit http://www.ze.com/the-zema-solutions/.

Deutsche Börse Creates US Dollar Hedged Version of HDAXOn August 19, 2014, Deutsche Börse launched the HDAX Hedged USD Index, which measures the performance of the underlying HDAX while eliminating foreign currency fluctuations. The HDAX Index measures all 110 stocks listed in the DAX, MDAX, and TecDAX indices, representing more than 95% of Germany’s free-float market capitalization.

The HDAX Hedged USD Index combines the performance of the underlying index with a hypothetical, rolling investment into one-month foreign exchange forward contracts. By selling foreign exchange forward contracts, Deutsche Börse claims market participants are able to lock in current exchange forward rates and manage their currency risk. Profits and losses from the forward contracts are offset by losses and profits in the value of the currency.

The DAX measures the development of the 30 largest and most liquid companies on the German equities market and represents around 80% of the market capitalization in Germany.

MDAX contains 50 medium-sized German companies and foreign companies operating primarily in Germany from traditional

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industrial sectors. These stocks are ranked directly behind the 30 DAX components in terms of market capitalization and exchange turnover.

TecDAX includes 30 of the largest technology companies in Germany based on market capitalization and order book turnover. All components are capped at 10%.

The HDAX Hedged USD Index is available back to December 30, 2004 with a base value of 100.

See the original announcement.

Two New ETNs from Boost Launched on XetraOn August 8, 2014, the following two new ETNs issued by Boost were launched on Xetra. The new products refer to indices in the BNP Paribas Future index family and give investors access to the inverse performance of 1-month futures contracts on German and U.S. government bonds with a leverage factor of 3. Additional returns are generated through interest revenue earned on the collateralized amount.

ETN Name Boost Bund 10Y 3x Short Daily ETPAsset Class BondISIN DE000A1ZLZB5Management Fee 0.30%Benchmark BNP Paribas Bund Future Index

The Boost Bund 10Y 3x Short Daily ETP provides a total return comprised of thrice the inverse daily performance of the BNP Paribas Bund Future Index. The reference index comprises a position in the Euro-Bund Future front-month contract, which tracks the yields of German government bonds with a residual maturity of 8.5-10.5 years.

ETN Name Boost US Treasuries 10Y 3x Short Daily ETPAsset Class BondISIN DE000A1ZLZC3Management Fee 0.30%Benchmark BNP Paribas US Treasury Note 10y Future Index

The Boost US Treasuries 10Y 3x Short Daily ETP provides a total return comprised of three times the inverse daily performance of the BNP Paribas US Treasury Note 10Y Future index. The reference index comprises a position in the 10-year US Treasury Note Future front-month contract, which tracks the yields of US government bonds with a residual maturity of 6.5 - 10 years.

See the original announcement.

ZEMA presently collects data from Deutsche Börse about derivatives products. To learn more about how ZEMA can leverage Deutsche Börse market data, visit http://www.ze.com/the-zema-suite/.

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ICE Acquires Trading Technology PatentsOn August 7, 2014, Intercontinental Exchange (ICE) announced that it has acquired intellectual property rights that relate to computerized trading strategies. The acquired intellectual property rights include U.S. patent numbers 7,177,833; 7,251,629; 8,498,923; 8,478,687; 8,660,940; 8,732,048; 8,725,621 and various related pending U.S. patent applications. Terms of the transaction were not disclosed.

The acquired intellectual property rights include patent claims covering the use of an automated trading system to make price and trading decisions based on market price information. The intellectual property rights cover multiple asset classes traded electronically on exchanges, including futures, options, and cash equities.

See the original announcement.

Finance market participants can easily align derivatives data alongside news updates in ZEMA’s dashboard reporting tool to gain an enhanced market perspective. To learn more, book a complimentary ZEMA demonstration.

Traiana Introduces Enhanced Cross-Asset Matching EngineOn August 13, 2014, Traiana launched the next generation of its post-trade, cross- asset allocation matching and confirmation service for both buy- and sell-side firms. Harmony Securities is available across various products, including cash equities, equity swaps, corporate and government bonds, municipal bonds, and treasury bills; it has been designed to meet industry processing requirements as well as forth-

coming regulatory changes, such as T+2 settlement.

Harmony Securities provides same-day cross-asset trade allocation, matching and confirmations via low latency processing. The enhanced post-trade matching service provides firms with increased flexibility in matching schema catering for all types of trading strategies, including combinations of cash and synthetic-equity allocations and many-to-many matching.

See the original announcement.

ZEMA, ZE’s data management solution, excels at displaying time-series data in charts, graphs, forward curves, and more. ZEMA also collects financial derivatives data from a wide range of sources. For further information, visit http://www.ze.com/the-zema-suite/.

ICAP Information Services and MTS Add Eurozone Index to RepoFunds RateOn August 6, 2014, ICAP Information Services (IIS) and MTS, a fixed income electronic trading venue in Europe, an-nounced that they are expanding the RepoFunds Rate indices to include RepoFunds Rate Euro (RFR Euro), a daily repo index for Eurozone sovereign bonds.

The new index, RFR Euro, is derived from eligible repo transactions that involve sovereign bonds issued by any Eurozone country as collateral. The index is based on centrally cleared, electronically executed one business day repo transactions executed on BrokerTec, ICAP’s global electronic fixed income trading platform, and MTS. Typically, the traded volume of eligible repo transactions across the two trading platforms is €230 billion per day (single counted).

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Designed as transparent and trade-backed references, the RepoFund Rate indices adhere to the IOSCO principles for financial benchmarks. RepoFunds Rate is a series of daily euro repo indices which reflect the effective cost of secured funding in Eurozone sovereign bond markets. Launched in 2012, the current indices (RFR Germany, RFR France, and RFR Italy) measure the cost of funding sovereign bonds issued by their respective countries. The indices are published at the end of each business day.

See the original announcement.

CME Launches New Futures and Options for Delivery of Standardized Bundle CombinationsOn September 22, 2014, the Chicago Mercantile Exchange (CME) will launch several new bundle futures and companion options for the physical delivery of standardized bundle combinations of CME Three-Month Eurodollar (ED) futures. The initial launch of bundle futures will include Two-Year (BU2), Three-Year (BU3), and Five-Year (BU5) contracts for physical delivery of standardized strips of 8, 12, or 20 consecutive quarterly ED futures, respectively. The initial launch will comprise Bundle futures for delivery in December 2014 and in March 2015.

Each Bundle future is identified by the contract month of the nearby ED future in the underlying deliverable grade Bundle combination. For example, the Dec2014 Two-Year Bundle future will be for delivery of a strip of eight quarterly ED futures expiring between Dec2014 and Sep2016, inclusive.

The last day of trading and final settlement date of an expiring Bundle futures contract will be the Monday prior to the third Wednesday of the contract delivery month.

The initial launch will include quarterly and serial options on Bundle futures. Options typically will terminate trading and expire at close of trading on the Friday before the third Wednesday

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of the option expiry month, similar to the expiry calendar that applies to Serial and Midcurve options on ED futures.

These futures will be made available on CME Globex, ClearPort, and Open Outcry.

Relevant information is included below:

NameClearing/Floor Code

Globex Code SPAN Code Product Size

Two-Year Bundle Futures

BU2 BU2 BU2Approximately $1,000,000 notional value

Three-Year Bundle Futures

BU3 BU3 BU3Approximately $1,000,000 notional value

Five-Year Bundle Futures

BU5 BU5 BU5Approximately $1,000,000 notional value

See the original announcement.

Manage financial market data with ease using ZEMA’s data collection, validation, analytic, and visualization functionalities. To learn more, book a complimentary ZEMA demonstration.

CME Clearing Europe Receives EMIR AuthorizationOn August 4, 2014, CME announced that its European clearing house, CME Clearing Europe, has received authorization as a central counterparty clearing house (CCP) under the European Market Infrastructure Regulation (EMIR). The authorization covers all OTC derivatives and futures products currently cleared by CME Clearing Europe. CME Clearing Europe lists a broad range of OTC and exchange traded derivatives, including interest rate swaps, energy and commodities, and FX contracts for clearing. It also provides services for CME Europe, CME Group’s London-based derivatives exchange.

CME Clearing Europe’s CCP authorization follows the announcement that CME Group’s European clearing house is the first central counterparty (CCP) globally to offer the full segregation client protection model with enhanced protection for all bankruptcy scenarios.

See the original announcement.

ZEMA collects over 300 financial market records. To learn more about ZEMA’s vast data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.

Thomson Reuters Begins Elektron Direct FeedOn August 4, 2014, Thomson Reuters announced the launch of its new direct feed service, Elektron Direct Feed, which provides customers with high-performance access to real-time market data sourced directly from individual trading venues.

Elektron Direct Feed is a hybrid solution offering hardware acceleration to achieve low latency and software optimization for recovery and static data mapping. Its use of configurable,

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multicast FPGA technology for real-time data processing also means that multiple direct feeds can be supported on a single server.

Covering U.S. cash equities initially, Elektron Direct Feed delivers a standardized, full tick, full depth-of-book solution. Over the course of 2014 and 2015, Elektron Direct Feed will supply data from U.S. futures and options exchanges, as well as expand its coverage of European venues.

Elektron Direct Feed uses FPGA technology from Celoxica. This partnership brings together data delivery expertise from Thomson Reuters with specialist hardware acceleration technology from Celoxica.

Thomson Reuters also offers a consolidated feed, Elektron Real Time, which together with Elektron Direct Feed allows it to provide customers with real-time data in customized formats and latencies.

See the original announcement.

Manage financial market data with ease using ZEMA’s data collection, validation, analytic, and visualization functionalities. To learn more, book a complimentary ZEMA demonstration.

Thomson Reuters Eikon Expands Access to Dubai Mercantile ExchangeOn July 21, 2014, the Dubai Mercantile Exchange (DME) announced that its

information can now be accessed through Thomson Reuters Eikon. Thomson Reuters Eikon is a solution for consuming real-time and historical data that features news, analytics, and data visualization tools.

The integration between DME and Thomson Reuters Eikon improves the ease with which Eikon and CME Direct clients can research, enter, and manage trades on DME. DME customers will receive access to CME Direct’s electronic execution capabilities alongside the tools available in Thomson Reuters Eikon. Thomson Reuters Eikon customers registered to trade on DME can now access DME’s benchmark Oman crude oil futures contracts via the Eikon integration with CME Direct, a front-end commodity derivatives trading platform provided by CME Group.

See the original announcement.

To view news updates pertinent to global commodities industries next to other data, use ZEMA, ZE’s comprehensive data management tool for financial market participants. ZEMA enables users to easily visualize data, news, and analytics in one screen, ensuring that users gain a global market snapshot. To learn more, visit http://www.ze.com/the-zema-suite/dashboard/.

NASDAQ OMX Adds First Trust Strategic Income ETFOn August 14, 2014, NASDAQ OMX announced that First Trust listed a new exchange-traded fund (ETF), entitled the First Trust Strategic Income ETF (FDIV), on the NASDAQ stock market.

FDIV seeks a high level of risk-adjusted income and diversification through the use of multiple asset classes, targeted investment strategies, and specialized management teams. By tactically

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blending multiple investment strategies, which includes both fixed-income investments and income-producing equity securities, the Fund hopes to provide a lower risk, total return alternative to focusing solely on one strategy.

See the original announcement.

ZEMA collects over 50 NASDAQ OMX records. To learn more about how ZEMA can enhance your data management processes, book a complimentary ZEMA demonstration at http://www.ze.com/book-a-demo/.

NASDAQ OMX Lists First Trust Enhanced Short Maturity ETFOn August 6, 2014, the NASDAQ OMX stock market began trading a new ETF issued by First Trust, the First Trust Enhanced Short Maturity ETF (FTSM).

FTSM is an actively managed ETF that seeks to provide current income, consistent with the preservation of capital and daily liquidity. FTSM uses an actively managed strategy that invests in short-duration securities, which are primarily U.S. dollar-denominated, investment-grade securities. The fund is invested across a broad range of asset classes to maintain diversification, and at least 80% of the fund’s assets are investment-grade securities.

See the original announcement.

NASDAQ OMX Introduces Compass EMP US Discovery 500 Enhanced Volatility Weighted Index ETFOn August 4, 2014, NASDAQ OMX announced that Compass EMP listed a new exchange traded fund (ETF) which began trading on Friday, August 1, 2014. The Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Index (CSF) is listed on the NASDAQ stock market.

CSF is designed to track the performance of the CEMP U.S. Small Cap 500 Long/Cash Volatility Weighted Index, before expenses. The fund tracks the CEMP Smart Beta Index and combines smart beta methodologies with the ability to move cash in the event of a market decline. The CEMP U.S. Small Cap 500 Long/Cash Volatility Weighted Index is based on the daily price of the CEMP U.S. Small Cap 500 Volatility Weighted Index. The index represents the broad U.S. small cap stock market and is designed to hedge downside risk potential.

See the original announcement.

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CME Delists T-Bill Futures, Index Swap Futures and Options, and HICP FuturesOn July 28, 2014, CME delisted the following products from CME Globex, CME ClearPort, and the CME trading floor. There is no open interest in these products.

Code Clearing/Globex TitleTB/GTB T-Bill FuturesOSP/OSS 3-Month Overnight Index Swap (OIS) FuturesOSP/OSS 3-Month Overnight Index Swap (OIS) OptionsHC/HC Eurozone HICP Futures

See the original announcement.

CME Removes Four Interest Rate ContractsOn July 28, 2014, CME delisted four interest rate contracts. These contracts were listed for trading on the CME trading floor and CME Globex; they were available for submission for clearing through CME ClearPort. There was no open interest in these contracts.

The respective product rule chapters and terms and conditions contained in the “Position Limit, Position Accountability and Reportable Level Table” located in the “Interpretations and Special Notices” section of Chapter 5 (Trading Qualifications and Practices) of the CME Rulebook were removed from the Exchange Rulebook.

Product Name Chapter Clearing Code13-Week U.S. Treasury Bill Futures 451 T1Eurozone Harmonized Index of Consumer Prices (HICP) Futures 414 HCThree-Month Overnight Index Swap Futures 460 OSPOptions on Three-Month Overnight Index Swap Futures 460A OSP

See the original announcement.

HKFE Announces Revised Margins for CITIC Pacific and HKEx FuturesOn August 4, 2014, Hong Kong Futures Exchange Limited (HKFE), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), modified the minimum margins to be collected by an exchange participant from its clients for the futures listed below. The adjustments are based on the clearing company’s normal procedures and standard margining methodology.

To view the current margins, refer to HKEx’s website. HKFE noted that the rates set out below are minimum rates; exchange participants should set their margin requirements according to clients’ individual circumstances.

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Futures Contract Margin Rate Initial Margin (HK$) Maintenance Margin (HK$)

CITIC Pacific Limited Full Rate 1,010/lot 806/lot

Spread Rate 303/spread 242/spread

Hong Kong Exchanges and Clearing Limited

Full Rate 1,120/lot 895/lot

Spread Rate 336/spread 269/spread

See the original announcement.

ICE Benchmark Administration Completes ISDAFIX TransitionOn August 4, 2014, ICE announced that ICE Benchmark Administration (IBA) has formally taken over the role of administrator of the ISDAFIX benchmark from the International Swaps and Derivatives Association (ISDA).

IBA was appointed the new administrator in April, and formally commenced its role as the administrator on Friday, August 1, 2014. The ISDAFIX benchmark represents the average mid-market swap rate for four major currencies: the euro (EUR), British pound (GBP), Swiss franc (CHF), and U.S. dollar (USD) at selected maturities on a daily basis. Market participants use the rate to price and settle swap contracts and as a reference rate for floating rate bonds.

The initial IBA calculation methodology continues the polled submission model, where contributing banks submit mid-point prices to the administrator. The assumption of administration by IBA is the first step towards migrating to a new market-based methodology of tradable quotes. This move will be made possible by the introduction of electronic markets for interest rate swaps and is designed to align the ISDAFIX benchmark with the principles for financial benchmarks published by the International Organization of Securities Commissions (IOSCO) in 2013.

Following the transition of the ISDAFIX benchmark, IBA is responsible for the following:

• Governance of all administrative processes including oversight and decisions of methodology, systems and controls relating to the benchmark

• Daily operations, including collection of input data and calculation of the benchmark rates• Ex-ante and ex-post checks on submissions to ensure the integrity of the benchmark.

See the original announcement.

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Deutsche Börse and Philippine Stock Exchange Sign MOUOn August 4, 2014, Duetsche Börse and the Philippine Stock Exchange, Inc. (PSE) signed a memorandum of understanding (MOU) to establish market data cooperation.

Some key areas on which the exchanges would like to collaborate include the licensing of current market data offerings, the increase of distribution channels for real-time data, and new product design and innovation. Deutsche Börse and the Philippine Stock Exchange expect to develop a concrete plan by the end of Q3 2014.

Deutsche Börse’s new relationship with the PSE is the latest in a series of market data partnerships with exchanges in the Asia region over the last year. In April 2014, Deutsche Börse and Shanghai Stock Exchange (SSE) announced a partnership under which SSE assumed responsibility for the real-time distribution, marketing, and sales of key Deutsche Börse market data products in mainland China. In October 2013, Deutsche Börse became the exclusive licensor of Bombay Stock Exchange’s market data and information products to all international clients.

See the original announcement.

AccuWeather Updates Windows Phone App to Include MinuteCast for Global LocationsOn August 20, 2014, AccuWeather announced it has launched a new version of its Weather for Life app designed for Windows Phone users. The app has several new AccuWeather features, such as MinuteCast, a minute-by-minute precipitation forecast for a person’s exact street address or GPS location. AccuWeather’s Windows Phone app is the first of its mobile apps to expand MinuteCast for more locations, including Japan, Ireland, United Kingdom, Canada, and the contiguous United States.

AccuWeather MinuteCast includes precipitation type and intensity as well as start and end times for precipitation. It gives users by-the-minute precipitation forecasts for the next two hours, set for their exact location. The MinuteCast is supported by both location-based and MinuteCast-patented technology.

In addition to MinuteCast, AccuWeather for Windows Phone provides severe weather alerts with automatic, push notifications in the United States, Canada, United Kingdom, and Germany, and severe weather notices for all other locations. The app also offers current conditions data, hourly forecasts for the next 72 hours, 15-day extended forecasts, and Live Tiles in three sizes for multiple locations that automatically update the forecasts on the Start screen.

See the original announcement.

The ZEMA graph in this example displays the average temperature forecast for New York, Sacramento, and Chicago in degrees Celsius from July 28 until August 28. The data is taken from AccuWeather’s RealFeel weather reports and is represented in ZEMA’s Market Analyzer application. This visualization is in the form of lines with points to specify significant points of

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change in temperature. ZEMA enables users to choose from a diverse array of visualization methods when representing AccuWeather data.

EIA Mapping Tool Shows US Energy Facilities in Areas at Risk of FloodingOn August 6, 2014, the U.S. Energy Information Administration (EIA) announced a new online tool that will help the public learn about energy facilities’ exposure to flooding caused by hurricanes, overflowing rivers, flash floods, and other wet-weather events. The Flood Vulnerability Assessment Map shows which power plants, oil refineries, crude oil rail terminals, and other critical energy infrastructure are in areas vulnerable to coastal and inland flooding.

The mapping tool combines EIA’s existing U.S. Energy Mapping System with flood hazard information from the Federal Emergency Management Agency (FEMA). To determine if a specific area is vulnerable to flooding, users can type an address, town, or county name in the “find address” box on the mapping system or can zoom in on areas of the United States highlighted with flood hazard information.

The Flood Vulnerability Assessment Map is available at: http://www.eia.gov/special/floodhazard/

See the original announcement.

ZEMA’s dashboard reporting tool helps commodity market participants align real-time weather data next to maps, news updates, and more to gain a better perspective of the complex relationship between environmental changes and industry products. To learn more, book a complimentary ZEMA demonstration.

NYMEX Introduces Capesize 2014 Timecharter Average (Baltic) FuturesOn August 25, 2014, the New York Mercantile Exchange, Inc. (NYMEX) listed the following dry bulk freight futures contract:

Contract Code Rule ChapterCapesize 2014 Timecharter Average (Baltic) Futures Contract CF2 769

The Capesize 2014 Timecharter Average (Baltic) Futures contract will be listed for trading on CME Globex and the NYMEX trading floor; it will be available for submission for clearing through CME ClearPort. 

Block trades are permitted for this contract, with a minimum transaction size of 5 lots, consistent with similar freight futures contracts.

See the original announcement.

ZEMA is an ideal solution for traders and analysts in the freight industry, as the software’s data visualization and dashboard reporting functionalities help users gain an enhanced market-wide perspective. To learn more, book a complimentary ZEMA demonstration.

Baltic Exchange and China’s Xinhua News Agency Release Shipping Center IndexOn August 21, 2014, the Baltic Exchange and China’s Xinhua news agency announced the release of a report and index that assesses the importance of the world’s key shipping centers. 

The index covers 46 of the world’s largest ports and cities and is designed to bring clarity to the investors and governments regarding the relative performance of shipping centers around the world.

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Singapore tops the list; London is in second place, closely followed by Hong Kong. All three cities have large port facilities and support comprehensive maritime business service sectors. Of the top ten global shipping centers assessed, five were in Asia, three in Europe, one in the Middle East, and one in the U.S.

The index is based on evaluations of the following criteria:

• Maritime services: brokerage, arbitration, ship management, maritime insurance, ship engineering, and ship repairs

• Business environment: economic freedom, tariffs, logistics efficiency and developed infrastructure, official corruption/transparency, national IT, and communications development

• Port facilities: container and commodity cargo volume, port depth, container berths, and number of quay cranes

The results are based on data from the following sources:

• The Baltic Exchange• Drewry Shipping Consultants• The Heritage Foundation• International Association of Classification Societies (IACS)• International Transparency Organization• International Union of Marine Insurance• Lloyd’s List• London Maritime Arbitrators Assoc. (LMAA) & The Society of Maritime Arbitrators• United Nations Conference on Trade and Development• United Nations E-Government Development Database• The Wall Street Journal and The Heritage Foundation, 2013 Index of Economic Freedom• The World Bank• Xinhua Index Co.

The ISCD Index formula converts data values on a scale weighted by relative importance to long-term center prosperity.

See the original announcement.

Market participants can use ZEMA to receive up-to-the-minute data regarding global freight markets. To receive a free ZEMA demonstration, visit http://www.ze.com/book-a-demo/.

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Platts to Cease Publishing NWE Oxo-Alcohols AssessmentsOn January 2, 2015, Platts will discontinue all oxo-alcohol assessments in Europe due to a shift in market dynamics. These assessments are presently located in Platts Petrochemical Alert.

The following assessments will be discontinued:

Assessment Code Monthly Average

N-Butanol FOB Rdam PHAPE00 PHAPF03

I-Butanol FOB Rdam PHAPI00 PHAPJ03

2-EH FOB Rdam PHAPM00 PHAPN03

DOP FOB Rdam PHAPQ00 PHAPR03

PA FL FOB Rdam PHAPU00 PHAPV03

N-Butanol FD NWE HPAPG00 HPAPH03

I-Butanol FD NWE HPAPK00 HPAPL03

2-EH FD NWE HPAPO00 HPAPP03

DOP FD NWE HPAPS00 HPAPT03

PA ML FD NWE HPAPY00 HPAPZ03

PA FL FD NWE HPAPW00 HPAPX03

See the original announcement.

ZEMA Updated to Collect New CAISO Data Reports For over 15 years, ZE has consistently kept up to date on the latest in energy and commodity data changes. ZE collects data from vendors spanning the weather, oil, natural gas, electricity, agriculture, and finance industries, including Platts, Argus, CME/NYMEX, ICE, and OPEC. ZE then provides its clients with access to both public (free subscription) and private data reports.

ZE not only provides its clients with reports collected from a wide range of data vendors, but helps them avoid potential collection gaps that may arise when data reports change in response to industry trends. ZE monitors all markets and updates ZEMA data parsers in the event of change to minimize information loss. Parsers are modified when reports from data vendors alter, report names or services are updated, and more. ZEMA clients can rest assured that their data is clean, accurate, and timely.

This month, ZE has gained new access to a handful of California ISO (CAISO) data feeds that will be released this fall. ZE took the initiative to acquire access to these reports in advance of CAISO’s upcoming October 1, 2014 web service changes. The changes cover the following CAISO systems: Open Access Same-Time Information System (OASIS), Automated Dispatch System (ADS), CAISO Market Results Interface (CMRI), Scheduling Infrastructure and Business

Rules (SIBR), and Outage Management System (OMS).

A handful of the new CAISO reports ZE will collect include:

1. PRC_EIM_GHG – EIM GHG shadow price GHG shadow price of the net imbal-ance energy export.

2. ENE_EIM_TRANSFER_LIMITS – EIM Transfer limits EIM transfer limits—after each RTPD and RTD market run is completed, OASIS will post the NSI low/high limits per each EIM BAA group that is used in the market.

3. ENE_EIM_TRANSFER –EIM Transfer EIM BAA Net Imbalance Energy Export (transfer) will be posted to OASIS for every RTD and RTPD market.

4. ENE_EIM_DYN_NSI – EIM BAA Dynamic NSI Dynamic Net Schedule Interchange for each BAA will be posted to OASIS for every RTD and RTPD market.

5. ENE_BASE_NSI – BAA Base NSI DAM and RTM hourly base NSI for each EIM BAA. All data shall be from the latest DAM and the first RTPD 15-minute market within the hour.

6. CAISO_ADS_INSTRUCTION Instructions for CAISO’s Automated Dispatch System.

7. OMS_TransmissionOutageResults

These reports are important for those looking to keep up to date on CAISO emissions data (1), the CAISO Energy Imbalance Market

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(2,3),  and those monitoring BAA transmission control (4, 5). Other upcoming reports ZE will collect from include SIBR, CMRI, and MRTU (Market Redesign and Technology Upgrade).

CAISO will also be replacing its existing outage management system (OMS). It will replace it with a new one with enhanced modeling capabilities and more accurate methods of managing outages. The system is expected to be implemented in October 2014, at which time the Scheduling and Logging for CAISO (SLIC) application will no longer be used for managing outages. For more detailed information about the new OMS, see the following link.

CAISO has continued to run its ISO External Market Simulation Plan, which involves providing participants with an opportunity to test their systems and proce-dures in advance of market implementation. This facilitates an effective dress rehearsal and helps expedite a smooth production launch. The simulations of fall release 2014 initiatives began on July 30, 2014 and will end on September 12, 2014. The release of the actual initiatives will be activated in the production environment on October 1, 2014. More information is available here.

For further detailed information on news about CAISO data reports, see the following links:

• Interface Specification for OASIS• ADS API Specification• CAISO Market Results Interface (CMRI)• SIBR Interface Specifications• ISO Interface Specification (OMS)

ZE has been voted “Data Management House of the Year” in the annual Energy Risk

software survey for five years in a row (2009-2013). Fortune 500 companies have relied on the ZEMA solution to provide the data analysis they need.

For more information on ZE’s data coverage, see here.

For more information on ZEMA or to book a complimentary demo, click here.

ZE and Interactive Data Develop Integrated ZEMA and Future Source Solution In May 2014, ZE and Interactive Data an-nounced a new alliance that has resulted in the integration of ZEMA’s commodity and en-ergy content into the FutureSource platform.

This integration enables FutureSource clients to access ZEMA’s valuable data, including real-time, exchange, third party, and proprietary content, within the FutureSource market data platform. The combined ZEMA and FutureSource solution delivers a series of functions that allow new and powerful ways to view and analyze data. Users can navigate to and view their chosen content sets within FutureSource’s quotes and grid analytics window, chart and analyze historical content sets, display powerful forward curve analysis, and easily export information to Excel for additional data analysis.

New Data Reports from ZEMAAt ZE, we are continuously working to expand our data coverage, as we provide our clients with data essential to their operations. Our highly flexible data parsers can collect information in any electronic format, from any source, and at a frequency clients need.

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ZE has added several new data reports to ZEMA following the publication of our July issue of ZE DataWatch:

Data Source Report Commodity SubscriptionAEMO Actual Effective Degree Day Others NoAESO Short Term Wind Forecast Electricity NoBloomberg Dow Jones UBSCI (CCR) Price YesCAISO CMRI Market Schedules HASP Electricity YesCAISO CMRI Schedule Prices RTD Electricity YesCAISO MRTU ENGY - Base NSI (DAM) DA Snapshot Electricity NoCAISO MRTU ENGY - Base NSI (RTM) T40 Snapshot Electricity NoCAISO MRTU ENGY - Base NSI (RTM) T55 Snapshot Electricity NoCAISO MRTU ENGY - EIM BAA Dynamic NSI (RTD) Electricity NoCAISO MRTU ENGY - EIM BAA Dynamic NSI (RTPD) Electricity NoCAISO MRTU ENGY - EIM Transfer (RTD) Electricity NoCAISO MRTU ENGY - EIM Transfer (RTPD) Electricity NoCAISO MRTU ENGY - EIM Transfer Limits (RTD) Electricity NoCAISO MRTU ENGY - EIM Transfer Limits (RTPD) Electricity NoCAISO MRTU PRC - EIM GHG Shadow Prices (RTPD) Electricity No

DECCDeliveries of Petroleum Products for Inland Consumption

Oil No

DGEG Monthly Fuel Sales in Portugal Fuel NoFederal Reserve Bank of New York

Federal Funds Rate Others Yes

Galileo Daily Weather Weather YesGFI European Natural Gas Closing Price Gas YesGME Gas Balancing Platform G+1 Segment Gas NoICAP Closing Run - Futures Energy YesICAP Closing Run - Spot Energy YesICAP European Natural Gas Closing Prices Energy YesIIR PowerCast Outages Electricity YesLCH.Clearnet OTC IRS Volume and Notional Outstanding Totals Price NoLCH.Clearnet OTC IRS Volumes by Product Price NoMarkedskraft CHP Hourly Actual Electricity YesMarkedskraft Coal Freight Price Forecast Perret Quarterly Coal YesMarkedskraft Coal Freight Price Forecast Perret Yearly Coal YesMarkedskraft Coal Freight Spot Price Perret Electricity YesMarkedskraft Coal Replacement Cost Perret Others YesMarkedskraft EEX Actual Capacity Germany Electricity YesMarkedskraft EEX Capacity Forecast Germany Electricity YesMarkedskraft Freight Price Forward Perret Quarterly Freight YesMarkedskraft Freight Price Forward Perret Yearly Freight YesMCRM Daily Energy Report Futures YesMeteoSwiss Daily Weather Weather YesNBP Exchange Rate - Table A - Average Currency No

NBPExchange Rate - Table B - Average - Inconvertible Currencies

Currency No

NBP Exchange Rate - Table C - Bid/Ask Currency NoPJM MSRS - RPM Auction Charges Electricity Yes

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PJM MSRS - RPM Auction Credits Electricity YesPJM MSRS - Zonal Aggregate Definitions Electricity YesRIM Intelligence Crude Intelligence Daily - Futures Oil YesRIM Intelligence Crude Intelligence Daily - Spot Oil YesRIM Intelligence Product Intelligence Daily - Futures Others YesRIM Intelligence Product Intelligence Daily - Spot Others YesSpeedwell Weather Daily Weather Weather YesSpeedwell Weather Hourly Weather Weather YesStandard & Poors GSCI Preliminary Closing Index Levels Others YesVigicrues River Flow Water NoWSI ISO Region Weighted Forecasts - Daily Weather YesWSI ISO Region Weighted Forecasts - Period Weather Yes

WSIMonthly Average and Record Min/Max & CDD/HDD Report

Weather Yes

PEGAS: Trading Results in July

Leipzig, Paris, August 4, 2014: PEGAS, the natural gas platform jointly established by the European Energy Exchange (EEX) and Powernext, announced that a total volume of 45.8 TWh was traded in July 2014 compared with 14.8 TWh traded in the same period of the previous year.

Spot MarketsOverall trading volumes on the Spot Markets amounted to 20.5 TWh in July, which constituted more than twice the volume traded in July 2013 (9.8 TWh). The German spot markets (market areas GASPOOL and NCG) recorded a volume of 7.2 TWh (July 2013: 2.7 TWh), whereby 1.1 TWh have been traded in quality-specific gas products. The French spot markets (market areas PEG Nord, PEG Sud, PEG TIGF) registered a total of 7.3 TWh (July 2013: 6.2 TWh). The volume traded on the Dutch TTF spot market amounted to 5.9 TWh traded in July (July 2013: 1.0 TWh). The Belgian ZTP spot market, launched on 9 July 2014, recorded 88,104 MWh for its first month of trading.

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Derivatives Markets In July, trading volumes on the PEGAS Derivatives Markets increased to 25.3 TWh. This is more than 5-times the volume traded in the same period in 2013 (5.0 TWh). The volume on the German Futures markets (GASPOOL and NCG market areas) reached 6.6 TWh (July 2013: 1.9 TWh). In the French market areas, a total of 3.7 TWh was traded on PEG Nord and PEG Sud Futures (July 2013: 2.3 TWh). The Dutch TTF Futures market registered a total volume of 15.0 TWh traded in July (July 2013: 0.7 TWh). Furthermore, a volume of 7,440 MWh was registered in the new ZTP Futures market.

Details on the natural gas volumes and prices are available in the enclosed monthly report and below.

PEGAS – Monthly Figures Report for July 2014Volumes

Spot Market Derivatives MarketJuly 2014 in MWh Jul 2014 in MWh

GASPOOL 2,710,318 1,618,148NCG 4,503,140 4,944,138

PEG Nord 5,032,700 3,598,440PEG Sud 2,177,234 149,420PEG TIGF 53,990 n/a

TTF 5,911,172 14,971,530ZTP 88,104 7,440

Total 20,476,658 25,289,116Indices

Spot Market Index NameJul 2014 Index Value (min./max. in EUR/MWh)

GASPOOL EEX Daily Reference Price 15.175 / 18.371NCG EEX Daily Reference Price 15.340 / 18.498

PEG NordPowernext Gas Spot DAP Powernext Gas Spot EOD

15.42 / 18.40 15.68 / 18.48

PEG SudPowernext Gas Spot DAP Powernext Gas Spot EOD

19.78 / 23.51 19.60 / 23.61

TTF EEX Daily Reference Price 15.057 / 18.211

Derivatives Market Index NameAug 2014 Index Value (in EUR/MWh)

GermanyEGIX (European Gas Index) – Monthly Average

16.691

GASPOOL EGIX – Monthly Average 16.556NCG EGIX – Monthly Average 16.831

PEG NordPowernext Gas Futures Monthly Index

17.29

PEG SudPowernext Gas Futures Monthly Index

21.97

TTFPowernext Gas Futures Monthly Index

16.56

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PEGAS to Launch Spot Contracts for NBP

Leipzig, Paris, July 30, 2014: PEGAS, the joint natural gas platform of EEX and Powernext, will further expand its product portfolio with Spot Market contracts for the British National Balancing Point (NBP). The new product is scheduled to be launched on 15 October 2014.

The offering for the NBP hub comprises physically fulfilled contracts for Within-Day, Day-Ahead, Weekend, Saturday, Sunday and Individual Days which will be tradable on Trayport® ETS(SM). The payment process for the trades already takes place on the following business day. Trading of the new NBP product will be available 24/7.

“The extension of our gas offering to the British market area is an important step to further develop PEGAS towards a truly Pan European gas platform”, says Jean-François Conil-Lacoste, Chief Executive Officer of Powernext. Peter Reitz , Chief Executive Officer of EEX, adds: “PEGAS has become the clear leader with regards to liquidity in exchange traded spot gas contracts in continental Europe. Our ambition is to extend this level of liquidity to the NBP spot market as well.”

Clearing and settlement of all transactions will be executed by European Commodity Clearing (ECC) which conducts the nomination of the trades on behalf of the participant and ensures a straight-forward financial settlement.

For trading of the new products, participants will be exempt from fees for six months, starting on 15 October. This includes trading fees as well as clearing and delivery fees. Furthermore, new members on PEGAS do not have to pay the annual member-ship fee for the first year of trading.

This announcement follows the successful launch of Spot and Futures contracts for the Belgian Zeebrugge Trading Point (ZTP) and the introduction of 24/7 opening hours on the French PEG Spot Markets. Since 9 July, spot contracts for Within-Day, Day-Ahead, Weekend, Saturday, Sunday and Individual Days as well as spreads between ZTP and NCG, TTF, GASPOOL and PEG-Nord are tradable. At a later stage, PEGAS will launch Spot contracts for the Belgian hub Zeebrugge Beach (ZEE) as well as the associated location spread between ZEE and NBP.

In the first half of 2014, a volume of 248.4 TWh was traded on the PEGAS markets which is more than the total volume reached in 2013 (222.6 TWh).

About PEGAS – Pan-European Gas Cooperation:PEGAS is a cooperation between the European Energy Exchange (EEX) and Powernext. In the framework of this cooperation, both companies combine their natural gas market activities to create a pan-European gas offering. Members benefit from one common Trayport gas trading platform with access to all spot and derivatives market products offered by the two exchanges for the German, French, Dutch and Belgian market areas. Furthermore, spread products between these

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market areas are tradable on the same trading platform. For more information: www.pegas-trading.com

About EEX:The European Energy Exchange (EEX) is the leading European energy exchange. It develops, operates and connects secure, liquid and transparent markets for energy and related products on which power, natural gas, CO2 emission allowances, coal and guarantees of origin are traded. In the context of its majority shareholding in Cleartrade Exchange (CLTX), EEX additionally offers the markets for freight, iron ore, fuel oil and fertilizer. Clearing and settlement of all trading transactions are provided by the clearing house European Commodity Clearing AG (ECC). EEX is a member of Eurex Group. For more information: www.eex.com

About Powernext:Powernext SA manages complementary, transparent and anonymous energy markets. Powernext Gas Spot and Powernext Gas Futures were launched on 26 November 2008 in order to hedge volume and price risks for natural gas in France, the Netherlands and Belgium. Powernext manages the National Registry for electricity guarantees of origin in France since 1 May 2013. Powernext owns 50 % in EPEX SPOT and 20 % in EEX Power Derivatives. For more information: www.powernext.com.

EPEXSPOT: French Day-Ahead Awakens

Paris, Leipzig, Bern, Vienna, August 1, 2014: In July 2014, a total volume of 30.9 TWh was traded on EPEX SPOT’s Day-Ahead and Intraday markets (July 2013: 29.8 TWh). The volume on the French Day-Ahead market marked a new record with 5,959,611 MWh of traded volume. This is a 5% increase from the previous record in February 2013 (5,673,213 MWh). The upsurge is due to several factors, such as an increase in hydro (+2%) and nuclear power production (+%9) compared to July 2013. At the same time, the usual weak demand in July was lower (-3%) compared to one year earlier. As a result, France exported significantly more electricity (+39% compared to July 2013).

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Day-Ahead MarketsIn July 2014, power trading on the Day-Ahead auctions on EPEX SPOT accounted for a total of 28,339,396 MWh (July 2013: 27,759,196 MWh) and can be broken down as follows:

AreasMonthly volume MWh

Monthly volume – previous year MWh

Price – monthly average (Base / Peak*) Euro/MWh

DE/AT 20,704,044 21,503,648 31.88 / 36.82

FR 5,959,612 4,363,712 25.49 / 33.26

CH 1,675,740 1,891,836 31.43 / 36.68ELIX – European Electricity Index

28.26 / 35.08

* Peak excl. weekend

Prices within the German and the French market, both coupled within the Multi-Regional Coupling, converged 35% of the time.

Intraday MarketsOn the EPEX SPOT Intraday markets, a total volume of 2,515,395 MWh was traded in July 2014 (July 2013: 2,020,511 MWh).

AreasMonthly volume MWh

Monthly volume – previous year MWh

DE/AT 2,237,815 1,707,267

FR 169,825 230,091

CH 107,755 83,153 In July, cross-border trades represented 17.1% of the total intraday volume. The volume in 15-minute contracts on the German and Swiss Intraday markets reached another all-time high and climbed to 475,655 MWh. It is a 6% increase from the previous record in June 2014 (449,494 MWh). In June, they represented 20.7% – more than one fifth – of the volume traded on the German and Swiss Intraday markets.

One year, one terawatt hour: During the first 365 days after the launch of the Swiss Intraday market on 26 June 2013, 976,241 MWh have been traded, which corresponds to 5% of the total Swiss volumes traded on the spot Exchange. 86.8% of all transactions were concluded across borders. This is a peak value which illustrates well the economic advantages of European power market integration. With the start of the Swiss Intraday market, 15-minute contracts were also launched in Switzerland, with the possibility to trade across borders with the German 15-minute market. With a yearly traded volume of 44,145 MWh or a share of 4.5% of the total Intraday volume, 15-minute contracts have made a precious contribution to the short-term intra-hour adjustment of supply and demand. Furthermore, the Swiss Intraday

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saw a new record volume in July. The Swiss Intraday market is a real success story and joins the ranks of the most liquid European Intraday markets.

About the European Power Exchange EPEX SPOT SE:EPEX SPOT SE operates the power spot markets for Germany, France, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European power consumption. EPEX SPOT also acts as market operating service provider for the Hungarian Power Exchange HUPX and operates the coupling between the Czech, the Slovakian, the Hungarian and soon the Romanian markets on behalf of the local Exchanges. It is a European company (Societas Europaea) based in Paris with branches in Leipzig, Bern and Vienna. Over 220 companies from Europe are active on EPEX SPOT. 217 TWh were traded on EPEX SPOT’s power markets in the first seven months of 2014.

Asia-Pacific Condensate Market Transformation Prompts New Argus Index

New flows of lightly distilled US condensate exports to the expanding Asia-Pacific market for petrochemical feedstocks highlight the need for more transparent price identifica-tion for condensates in the region.

The Argus Condensate Index (ACI), launched by energy price reporting agency Argus this

month, is a key indicator of value for participants in the emerging market to supply petrochemical feedstocks from the US and other producers to Asia-Pacific.

The first tankers carrying US lightly distilled condensate have been booked to take cargoes from the Gulf coast to Japan and South Korea, following US commerce department authorization of exports by US firms Pioneer and Enterprise from the Eagle Ford shale formation in Texas. The move clarifies the terms of a 40-year old ban on virtually all US crude and condensate exports. At the same time, new splitters in South Korea, Singapore and China are boosting Asia-Pacific demand for condensates this year.

The ACI will bring transparency to a market affected by diverse price signals, including the relative value of crude and naphtha. The daily ACI reflects the lowest delivered price in southeast Asia of the two most traded condensate grades in the region — Qatari Deodorized Field Condensate (DFC) and Australian North West Shelf (NWS). Qatar exports 22 cargoes of DFC a month, mostly to Asia-Pacific, and Australia markets five cargoes of NWS condensate each month.

Argus Media chairman and chief executive Adrian Binks said: “Argus works with the industry to develop the price assessments needed for transparency. The ACI will help market participants understand value and realize opportunity.”

The ACI is published in the daily Argus Crude market report and through Argus Direct, an advanced online platform.

Notes to Editors:Condensate is formed when pressurized field

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petroleum condenses from gas into light liquids on coming to the surface, where the temperature and pressure are lower. Distilling it helps stabilize the condensate, and the commerce department has now made clear that this process makes it eligible for US export. Condensate can be refined in the same way as crude, but splitters are often a more appropriate way of obtaining higher-value products and petrochemicals from the feedstock.

US condensate output has doubled to 1mn b/d in five years. But splitters to process the rising production have yet to be built in the US, while condensate splitter capacity in Asia-Pacific will reach 1.1mn b/d by the end of this year from about 665,000 b/d a year earlier. Asia-Pacific’s newly added processing capacity can handle a range of condensate with varying sulphur content from Asia, west Africa, the Mediterranean and now the US. And regional refineries process condensates in crude distillation units (CDUs) when they calculate that margins from processing the feedstock are better than for light crude.

The bulk of the increase in Asia-Pacific condensate splitter capacity is related to the start-up of four projects — Jurong Aromatics (100,000 b/d) in Singapore, SK Energy (120,000-140,000 b/d) and Samsung Total (140,000 b/d) in South Korea, and China’s Tenglong unit, which originally came on stream in 2013 but has been boosting runs this year.

Distillation uses heat to separate a liquid into distinct components, and is associated with almost every downstream process, especially CDUs in refineries.

Light distillation is used in a stabilizer, where a small, simple fractionator removes the

most volatile elements in crude and condensate output in the field.

A condensate splitter is a simple fractionator that can separate liquids into fewer components than a modern refinery’s CDU, but more components than a stabilizer used in light distillation. Splitters separate the lightest components in condensates — including ethane, propane and the C5+ group, which comprises naphtha and natural gasoline.

Media Contacts: Singapore Jim Nicholson +65 6496 9960 mediasg@argusmedia.com

OTC Global Holdings Adds Forwards for Crude Oil

OTC Global Holdings LP (OTCGH) is excited to leverage its share in crude oil trading and announce the addition of its new market data service, Crude Oil Forward Curves. OTCGH’s liquidity in the crude oil space has allowed the Market Data team to be able to produce a forward curve product that will give end users a high quality and affordable option.  The forwards will be available in easy to use .CSV and .XLS files; in addition we are working now with our partner companies to make sure this data is available through their systems as well.

Sample Crude Oil Forward Curve Report

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Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX)

On the New York Mercantile Exchange (NYMEX), crude oil prices for NYMEX prompt-month contracts for Brent and Western Texas Intermediate (WTI) dropped for the second month in a row. By the end of the fourth Friday of August 2014, the prices of Brent and WTI dropped by 4% and 5%, respectively. When compared to the previous month, in August 2014 prompt-month contracts for Brent slid to $104 USD/Bbl, whereas the prompt-month contract for WTI sank to $97 USD/Bbl. In August 2014, data from NYMEX future settlements showed that Brent reached the lowest price levels in the past 12 months—$6 USD/Bbl below the August 2013 average price. The past 12-month averages for Brent and WTI on NYMEX are $109 USD/Bbl and $101 USD/Bbl, respectively.

The slightly larger drop in the European benchmark caused the Brent-WTI spread (represented by the purple area in the graph above) to hit $7 USD/Bbl. Also, the Brent-WTI spread has been $8 USD/Bbl on average over the past year.

The U.S. is currently at the center of attention as the market heads into maintenance season, during which time market participants will be aiming to reduce risk exposure. On the other hand, geopolitical tensions in the Middle East have continued, including U.S. air strikes in Iraq and the possibility of air strikes against Syria. Some strikes are in retaliation to the Islamic State terrorists who recently beheaded an American journalist in the region. Despite this, the global crude market tumbled in August 2014 as supply surged and demand declined.

The end of driving season in the summer and the encroaching refinery maintenance season weakened demand at a time when Libya and Iraq have swollen global supplies.1 The increase in crude supply from Libya (612,000 barrels a day) and Iraq (300,000 barrels a day) came as the EIA forecasted U.S. production will reach 9.28 million barrels per day next year, the highest annual average since 1972.2 The decline of global crude benchmarks may be attributed to strong supplies and tepid demand. 1 “Crude Bets Tumble as Global Supply Surges,” Financial Post, August 25, 2014, accessed August 25, 2014, http://business.financialpost.com/2014/08/25/crude-bets-tumble-as-global-supply-surges/.2 Ibid.

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Crude Oil Brent vs. WTI: Forward Curve (NYMEX)

On the New York Mercantile Exchange (NYMEX), forward curves for Brent and Western Texas Intermediate (WTI) dropped in August 2014 for the next 5 months when compared to the previous month, but market participants expect both benchmarks to slightly rise after this period until September 2015. The NYMEX Brent forward curve for delivery in the next 4 months (represented by the blue line in the graph above) dropped by $2 USD/Bbl to $108 USD/Bbl, while WTI (the red line) shed $1 USD/Bbl to reach $101 USD/Bbl for the same delivery period. The Brent-WTI spread decreased to $10 USD/Bbl (the purple area) on average for the next 25 months.

Crude oil prices for short-term delivery until the end of the year fell on both sides of the Atlantic Ocean in August due to weak economic data, which hinted at softening oil demand and ample supplies. Some fears about European economic growth arose this August, at least in the short-term, following the shrinking of Germany’s economy, France posting no growth, and Russia and the European Union imposing sanctions against one another regarding the Ukraine crisis. Additionally, OPEC production has neared a 6-month high, while U.S. production levels are on the rise and may reach their highest levels since 1972, according to EIA estimates.3

3 “Short-Term Energy Outlook,” EIA, August 12, 2014, accessed August 25, 2014, http://www.eia.gov/forecasts/steo/.

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North American Natural Gas Spot Prices (ICE)

On the Intercontinental Exchange (ICE), natural gas prices dropped as tepid demand and strong supplies pushed prices down in all observed North American hubs by the end of August 22, 2014. As ICE data showed in this month, New York’s Transco Zone-6 experienced the largest fluctuations, ranging from $2.15 USD/MMBtu to $2.91 USD/ MMBtu, yet remained the cheapest among all observed cities. On ICE, monthly average gas prices fell in New York’s Transco Zone-6 by 15% to $2.51 USD/MMBtu, in Chicago Citygates by 7% to $3.91 USD/MMBtu, in Henry Hub by 7% to $3.85 USD/MMBtu, and in California’s PG&E Citygate by 6% to $4.49 USD/MMBtu.

For the week ending August 20, 2014, EIA’s “Natural Gas Weekly Update” reported that natu-ral gas spot prices dipped due to falling temperatures in most parts of the country. EIA report-ed that U.S. consumption decreased (a 1.3% decline in power-sector gas consumption) as temperatures remained cooler than normal in most areas of the country.4

4 “Natural Gas Weekly Update—Week Ending August 20, 2014,” U.S. Energy Information Administration, August 20, 2014, accessed August 25, 2014, http://www.eia.gov/naturalgas/weekly/.

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Henry Hub Natural Gas Forward Curve (ICE)

On the Intercontinental Exchange (ICE), natural gas futures available for trade in the next 12 months at Henry Hub were relatively flat in August 2014 when compared to the previous month, as cool temperatures persisted in much of the country. The average price of Henry Hub natural gas in August 2014 for September 2014-September 2015 contracts (represented above by the orange line) dropped by 2% to $3.93 USD/MMbtu when compared to July 2014 (represented above by the blue line) for delivery in the same period.

When compared to last month, Henry Hub natural gas futures in August 2014 fluctuated 1% less, varying between $3.79 USD/MMbtu (May 2015) and $4.14 USD/MMbtu (January 2015) for delivery in the next 12 months. Data from ICE suggests the spread between August 2014 and previous month contracts (represented above by the red bar) dropped by $0.08 USD/MMbtu until September 2015.

For the week ending August 20, 2014, EIA’s “Natural Gas Weekly Update” reported that temperatures in the lower 48 states averaged 23 Celsius in the fourth week of August 2014, below the 30-year normal temperature.5 Also, storage builds from the previous period were larger than market expectations of 84 billion cubic feet (Bcf) by 4 Bcf, with all 3 regions posting larger-than-average builds during this period.

5 “Natural Gas Weekly Update—Week Ending August 20, 2014,” U.S. Energy Information Administration, August 20, 2014, accessed August 25, 2014, http://www.eia.gov/naturalgas/weekly/.

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Actual Weather (AccuWeather)

From July 2014 to August 22, 2014, the rise in temperature slowed down in all observed North American cities, indicating the end of summer. The monthly average temperature in San Diego stayed at 23 Celsius (C), while the temperature dropped in Chicago and New York by 2 degrees to 21C and 23C, respectively. On the other hand, San Antonio got warmer by 1 degree, feeling like 32C when compared to the previous month.

In August 2014, the 2-year average in all observed cities was varied. When comparing the past 2-year average of August temperatures to August 2014 temperatures, this year’s August felt 1 degree warmer in San Diego, but it felt slightly cooler in Chicago, San Antonio, and New York by 3, 1, and 2 degree(s), respectively. In August 2014, the city of Chicago experienced the largest fluctuations again among all observed cities, as the city reached 16C mid-way through the month and felt like 27C on August 22. This year’s August ended up being slightly mellower than the normal seasonal pattern for this time of year, based on the 2-year average temperature and the previous month.

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Electricity: Day-Ahead Prices (ICE)

On the Intercontinental Exchange (ICE), electricity day-ahead prices fluctuated in different directions in August 2014 when compared to the previous month. From July to August 2014, electricity day-ahead prices fell in NYISO by 23% to $38 USD/MWh, in PJM by 17% to $40 USD/MWh, and in CAISO’s SP15 by 6% to $50 USD/MWh. On the other hand, ERCOT (Texas) day-ahead prices rose by 10% to $40 USD/MWh when compared to the previous month.

When comparing August 2014 to August 2013, data from ICE shows that NYISO and PJM dropped by 17% and 5% from $46 USD/MWh and $42 USD/MWh, whereas CAISO’s SP15 and ERCOT went up by 11% and 9% from $45 USD/MWh and $37 USD/MWh in 2013, respectively.

According to the latest EIA “Short-Term Energy Outlook” report, which was released on August 12, 2014, residential sales of electricity in 2014 are expected to average 2.1% more than in 2013.6 Although the EIA estimates that U.S. retail sales of electricity to the industrial sector will remain relatively flat in 2014, the commercial sector is expected to push electricity sales by 1.2% in 2014 due to the strong growth of industrial consumption in the West South Central area. On the supply side, EIA projected that total U.S. electricity generation in 2014 is expected to grow by 1.1% from 2013 to an average of about 11,200 gigawatt hours per day. According to the EIA’s latest report, coal and natural gas are the leading sectors in U.S. electricity generation, as they have the largest share of total generation—41% and 28%, respectively.

6 “Short-Term Energy Outlook - August 12, 2014 014,” U.S. Energy Information Administration, August 12, 2014, accessed August 25, 2014, http://www.eia.gov/forecasts/steo/report/electricity.cfm.

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InDepth

By Vera Tikhomolova

The Future of the Natural Gas Market

Part Two: Global Demand and Major Consumers

The July 2014 edition of ZE DataWatch included the first In Depth article in this two-part series about geopolitical and market trends affecting the global

natural gas market. Last month’s article discussed current events impacting global supply; this month’s issue will address demand.

Introduction: Trends in Global DemandThe global natural gas market has become more dynamic in recent years, in part due to the substantial global increase in natural gas consumption (Figure 1).

Figure 1: Natural Gas Consumption around the World

Source: EIA (http://www.eia.gov)

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InDepthIt is clear that this demand will only increase further. The EIA projected an increase of 1.7 % annually between 2010 and 2035 in its last “Annual Energy Outlook” report.1 BP expected an increase of 1.9% annually between 2012 and 2035 in its 2014 “Energy Outlook 2035.”2

Asian demand has been the largest driver of global natural gas market development recently. As shown in Figure 2, the biggest demand increase is expected in China. In OECD-Europe3 countries, demand is projected to remain at a high level.

Figure 2: Demand by Region

Source: EIA (http://www.eia.gov)

It is obvious that due to the partial switch from nuclear to gas in Europe’s power sector—the aftermath of the 2011 Fukushima nuclear disaster in Japan—natural gas has become more important as a global energy source.

Even if the Fukushima accident hadn’t happened, several developments would have posed attractive alternatives to nuclear power anyways: the reduction of coal-fired power generation in Europe and North America; increased intermittent wind generation; and clean-fuelled, quick-starting natural gas-fired generation. The operating cost differences between gas-powered generation and coal and nuclear generation are offset by meeting regulations. Overall, the increase in gas-fuelled power has driven natural gas demand.

As shown in Figure 3, Europe and Asia are expected to remain major natural gas importers in the coming years. Moreover, Europe is expected to increase its natural gas imports due to growing demand and declining domestic production, mainly in the U.K. and the Netherlands. The Asia Pacific is expected to become the largest importing region in ten years. China and India are constantly increasing their exports and will remain the biggest market players in the near future.

1 “Annual Energy Outlook 2014—With Projections to 2040,” EIA, April 2014, accessed August 20, 2014, http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf. 2 “BP Energy Outlook 2035,” BP, January 2014, accessed August 20, 2014, http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-Outlook/Energy_Outlook_2035_booklet.pdf. 3 OECD - the Organization for Economic Co-operation and Development (OECD)—mainly includes European countries, North American countries, and Chili, Japan, Korea, Australia, and New Zealand.

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InDepthFigure 3: Regional Net Export

Since the global natural gas market has been in the process of developing, the structure by which gas is imported has changed. With shale gas development in the U.S. and new liquefied natural gas (LNG) export capacities that have come on stream in Qatar, imports of LNG are rising. It is apparent that Europe and Asia are major areas of interest and sources of conflict for the world’s biggest natural gas exporters. Current large exporters (Qatar, Russia) and potential exporters (the U.S.) are trying to use different strategies to increase their deliveries into these regions.

The European MarketFigure 4 reveals that only two European countries produce more natural gas than they consume: Norway and the Netherlands.

Figure 4: Natural Gas Production and Consumption, 2012

Source: EIA (http://www.eia.gov)

Figure 5 also shows that the only European countries which export natural gas are Norway and the Netherlands.

Source: BP (http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-Outlook/Energy_Outlook_2035_booklet.pdf)

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InDepthFigure 5: Natural Gas Net Export

Source: EIA (http://www.eia.gov)

As a result, many European countries are Russia’s largest natural gas importers, as can be seen in Figure 6.

Figure 6: Gazprom Natural Gas Exports and the Total Imports of European Countries

Source: Gazprom, EIA (http://www.gazprom.com/about/marketing/europe/) (http://www.eia.gov)

Gazprom supplied Europe with 161.5 billion cubic meters–5703.3 cubic feet4–of gas in 2013, remaining the key gas supplier to the European market.

4 “Europe,” Gazprom, accessed August 20, 2014, http://www.gazprom.com/about/marketing/europe/.

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InDepthHowever, the European gas market is currently experiencing a significant change. Recently Middle Eastern and North American LNG companies have been making efforts to enhance their positions in the European market, creating LNG contracts that are beneficial for European consumers. As a result of natural gas hub developments, including the U.K. National Balancing Point (NBP), Belgium Zeebrugge, and the Netherlands TTF, spot trades are becoming very real, very attractive alternatives to oil-indexed contracts. Spot supply—most of which is currently from Qatar—is a relatively cheap way to meet demand in comparison to expensive long-term oil-indexed contracts.

Consequently, Norwegian Statoil recently signed a £13 billion supply agreement with U.K. utility Centrica that links natural gas prices to NBP benchmarks. Centrica also signed an agreement with Qatar for 2.4 million tons (3.26 bcm) per year of LNG supplies.

Moreover, due to the shale gas revolution in the U.S., large amounts of LNG are expected to be delivered to European spot markets. For example, in June 2014 Gas Natural from Spain signed a contract with Cheniere that links natural gas prices to the U.S. spot market (Henry Hub). BG Group signed a similar contract with Cheniere in 2011.

Given these changes, the majority of European natural gas market participants are doing everything they can to get Gazprom and other long-term suppliers to revise the terms of their contracts. Big international companies are also looking for a way to develop substantial shale reserves in Eastern European countries, primarily in Poland and Ukraine.

Overall, it is very difficult to predict who is going to improve or lose their positions in the European natural gas market, even in the near future.

The Asian MarketAs can be seen in Figure 7, Asian consumption is much larger than Asian production. China, Japan, and South Korea are currently major natural gas consumers.

Figure 7: Natural Gas Net Exports (Asian Countries)

Source: EIA (http://www.eia.gov)

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InDepthQatar has been exporting natural gas to the Asian market for a long time. The U.S. has also started exporting LNG to Japan and some other Asian countries. Gazprom, too, has been trying to improve its position in this market.

Russia has been attempting to create long-term contracts with China for many years. Finally, given recent events in Ukraine, this dream became a reality: Russia recently secured an unprecedented 30-year contract with China, which gives Moscow access to a mega market for its leading export. Under this contract, Western Siberia will begin to deliver gas supplies to China from 2018-2020. The final price of Russian gas, which will flow through a 2,500 mile pipeline from two fields in Siberia, has not been disclosed. Historically, China has paid less for natural gas than Gazprom’s European clients do–throughout the 2000s, Beijing signed numerous governmental memorandums with Turkmenistan, Uzbekistan, and Kazakhstan, all of whom sell this commodity at a rate much lower than Gazprom’s European rates. Russia can try to charge an established price close to what European countries pay, but China will likely appeal for a price akin to that of the cheaper gas it buys from Central Asia.

Gazprom is also looking to expand its cooperation with Japan—by this year’s end the company expects to sign binding agreements with leading Japanese energy companies concerning supplies from the planned Vladivostok (Pacific Ocean region) LNG export project. The potential extension of the future Sino-Russian gas route to the Indian border is also possible, as the Indian market has become significant. Gazprom already made a deal in 2011 to supply 2.5 million mt/year of LNG to India and is expecting a substantial increase in this amount.5

Ultimately, while Qatar remains on the market, it is unlikely that Gazprom will be able to provide natural gas to the Asia Pacific region at oil-indexed prices.

Other Market Drivers: Geopolitical TensionsGeopolitical tensions have been an important driver of the crude oil market for a long time. In the natural gas market, geopolitical tensions resulting from globalization are becoming increasingly important too. This is not only because natural gas contracts in Europe and Asia are related to global crude oil prices, but because of worldwide battles for the control of the natural gas market’s development.

For example, Qatar would make more money selling LNG to Asia under long-term indexed contracts than they would by feeding the European spot market with supplies in the short to medium term. However, Qatar’s sales in Europe are not only related to pure sales, but to politics—ultimately it is important for Qatar to sell gas in Europe, although this is less profitable than Asian sales.

Gaining control over Ukrainian shale gas production is very important to European natural gas market players. Moreover, the instability in Ukraine could also be a reason why LNG export

5 “Gazprom Marketing & Trading Singapore Plans to Export 2.5 Million Tonnes of LNG to India Annually,” Gazprom, July 21, 2011, accessed August 20, 2014, http://www.gazpromexport.com/en/presscenter/news/281/.

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InDepthterminals in the U.S. have recently received fast-tracked approvals, as these terminals will ship gas to China and Japan, both of whom pay a 50% price premium in comparison to Europe. A newly created U.S. State Department group is promoting the fast-tracking of LNG export terminals, using the Ukrainian crisis as a pretext.

The Ukrainian crisis and resulting sanctions have pushed Gazprom to sign an incredible contract with China, and the price of future gas to be delivered as per this agreement is still under discussion. This contract is ultimately of interest because it is possible that its agreed-upon prices will be linked to Central Asian producers. Traditional Gazprom contracts are more expensive than the gas that China buys from Central Asia. As a result, Russia may be under pressure to renegotiate European prices too.

Finally, for the first time ever in the history of relations between the U.S. and Russia, possible economic sanctions against Russia as a result of the Ukraine crisis may have a long-term negative effect on global energy security.

ConclusionOver the past several years, researchers have argued that natural gas pricing is in transition worldwide. In almost every country, long-term international gas contracts established many decades ago are under review. This is mainly due to the different dynamics of the current gas market.

Since 2011, a number of long-term LNG import contracts have been signed based on a benchmark formula. It is quite unlikely that as broader fundamentals tighten, gas will remain a producer’s market with oil indexation in Europe and Asia.

In Europe, the development of the spot market, which depends on an increasing share of Qatari and U.S. LNG, will create financial problems for mid-stream utilities who were obliged to purchase gas under long-term contracts priced according to a formula linked to oil products. In addition, despite Asia’s unprecedented 30-year contract for Russian gas delivered to China, the region still requires spot LNG cargoes as well.

Gazprom needs to revise its export policy to European countries, as the development of the LNG spot market could seriously harm the country’s export revenues. The large percentage of global LNG sold as spot cargoes and unconventional natural gas development have been a key focus for industry participants. However, spot cargoes are not entirely “cheap” in Europe. Currently Europe is not technically prepared for a large-scale replacement of Gazprom’s pipeline gas with spot market gas. To be prepared, Europe must build expensive facilities to decompress and store gas, as well as construct new pumping stations that utilize large volumes of LNG. This infrastructure will further add to the price of Europe’s gas.

Ukrainian geopolitical tensions may also lead to further changes in the European natural gas market. Currently 40% of Gazprom’s natural gas transportation infrastructure runs through

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InDepthUkraine. Ukraine has been considering a joint venture with European and U.S. companies, who may run the gas network and request to renegotiate transit deals any time.

Meanwhile, the U.S. Department of Energy has approved the export of LNG to non-Free Trade Agreement countries (to Asia in particular), but this has led to uncertainty as to whether this is a solution to the “fundamentals problem” in Asia. In addition, the establishment of a reliable reference price for the market has not yet taken place, as the spot cargo market is not liquid enough to do so. Whether the determination of LNG buyers to promote a market-based solution to their pricing problems will be sufficient is not yet clear.

Geopolitical tensions only boost uncertainty. With continuous conflicts in the Middle East and North Africa, there is no way to predict future natural gas flow from this region. Given the escalation of the Ukrainian conflict, economic factors alone do not paint a complete picture of the European natural gas market’s development. Instead, political reasons, such as possible sanctions against Gazprom’s hegemony, should be taken into consideration as well.

Overall, future natural gas prices are currently the product of many assumptions. With the development of the liquid natural gas spot market in Europe, the changing Asian market, increased shale gas production in the U.S., possible shale gas production in Europe and Asia, and potential changes to pricing mechanisms, it is clear that natural gas prices around the world will eventually adjust to new realities.

Bibliography“Annual Energy Outlook 2014—With Projections to 2040.” EIA. April 2014. Accessed

August 20, 2014. http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf.

“BP Energy Outlook 2035.” BP. January 2014. Accessed August 20, 2014. http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-Outlook/ Energy_Outlook_2035_booklet.pdf.

“Europe.” Gazprom. Accessed August 20, 2014. http://www.gazprom.com/about/marketing/europe/.

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InDepth“Gazprom Marketing & Trading Singapore Plans to Export 2.5 Million Tonnes

of LNG to India Annually.” Gazprom. July 21, 2011. Accessed August 20, 2014. http://www.gazpromexport.com/en/presscenter/news/281/.

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