ABOUT US

OUR LEADERSHIP

Amit Sinha

Head of Technology

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Mr. Sinha is the Head of Technology at OTCGH. He has more than 18 years of technical experience and leads the development efforts and quality assurance of the EOXLive Platform.

He has extensive experience in developing and supporting enterprise application software for trading and risk management for commodities, finance and compliance domains. Prior to his current role, Mr. Amit worked as a senior associate at EOX Holdings LLC.

Before joining OTCGH and EOX Holdings LLC, Mr. Amit worked as a software developer at Saracen Energy and as a senior member of the technical staff at Oracle Corporation. He has a Bachelor of Technology degree in Civil Engineering from the Indian Institute of Technology (IIT) in Delhi.

 

Press and Media

Exchange giants take their rivalry to Texas as shale oil booms

Battle of the contracts reflects Houston’s growing status as an energy trading hotspot

Gregory Meyer in New York and David Sheppard in London yesterday

The world’s two biggest energy exchanges have taken their fierce rivalry to Houston, Texas in pursuit of business linked to the millions of barrels of shale oil arriving in the city every day.

Last last year, exchange operators CME Group and Intercontinental Exchange introduced duelling futures contracts that track the price of West Texas Intermediate crude as delivered at the coastal city.

The battle between the contracts — dubbed WTI Houston and Permian WTI — is a reflection of Houston’s growing status as an energy trading hotspot, as US oil production breaks records, Texas refineries add capacity and exports of crude soar.

At the moment, oil markets in the Gulf coast region lack widely traded derivatives contracts, which is a potential problem for companies trying to hedge risks. Contracts culminating in physical delivery at Houston would be a purpose-built tool which reflect the city’s emergence as a gateway between domestic and international markets, exchange executives say.

At stake is the chance to own the next major oil contract that some believe could be a major money-spinner for the two exchanges. CME of Chicago and ICE of Atlanta have earned billions of dollars in revenues since establishing the world’s two main oil benchmarks — WTI and North Sea Brent, respectively — three decades ago.

“This is not our average contract launch,” says Jeff Barbuto, global head of oil marketing at ICE. “US barrels are going to become more and more relevant to global oil flows.”

Exchanges owned by ICE and CME have competed in crude oil futures since the 1980s. ICE’s Brent crude benchmark is based on North Sea supply. CME’s light, sweet WTI benchmark is delivered to the storage hub of Cushing, Oklahoma — a small town about 500 miles north of Houston.

At times, the price of oil at Houston disconnects from prices in the North Sea, Cushing or both, suggesting the new contracts could be useful to companies selling oil there. Volumes have picked up in recent weeks.

“We are following the lead of the commercial customers that are telling us both with their investments and with their marketing where they need risk management,” says Peter Keavey, CME’s global head of energy.

The contracts present somewhat different opportunities for each exchange group. At CME, Houston trading complements its flagship oil contract. “The key benchmark is still WTI-Cushing,” Mr Keavey says.

For ICE, Houston is a potential beachhead in the US crude oil market, where its main contract is a “lookalike” that tracks the price of CME’s WTI. “ICE would love this to be a giant contract,” says Campbell Faulkner, chief data analyst at OTC Global Holdings, a Houston-based energy broker.

Academic research has shown that new futures contracts are likely to fail unless they are substantially better at reducing risks than existing futures contracts, says Hilary Till, principal at Premia Research in Chicago.

She cites the economist Holbrook Working’s conclusion that commercial traders would choose an imperfectly tailored futures contract — such as WTI-Cushing to manage risks at Houston — if it protected them against extreme losses, and if the cost of entering and exiting the market were small.

CME’s WTI-Cushing and ICE Brent are already deeply traded markets with daily volumes hundreds of times higher than the Houston contracts.

“The history of well-designed futures contracts not gaining traction is very long,” Ms Till says.

The new CME contract is delivered at Houston terminals owned by Enterprise Products Partners. Its rules require oil with gravity, or density, that measures within a narrow band of 40-44 “degrees”. The oil may contain no more than 0.275 per cent sulphur content and four parts per million of the metals nickel and vanadium.

ICE’s contract is delivered at Houston terminals owned by Magellan Midstream Partners, whose specifications allow oil with a wider gravity band of 36-44 degrees and a sulphur cap of 0.45 per cent.

“We have a tighter spec,” CME’s Mr Keavey says.

ICE, however, has been publishing monthly average readings of gravity, sulphur and metals to demonstrate the consistent quality of the WTI underpinning its contract. The unblended crude is tapped from pipelines running straight from oilfields in west Texas’s Permian Basin, according to the exchange company.

“We’re really betting that quality control all the way from the wellhead to the water is going to make the difference,” Mr Barbuto says.

Dennis Sutton, executive director of the Crude Oil Quality Association, an industry group, says ICE’s reports “could lead me to believe that it is better quality,” but he noted that the figures were averages which could mask day-to-day variation.

“If I had crude buyers asking me which ones should I buy and how much should I pay, I’d need to run the numbers through more sophisticated linear program models to come up with the answers,” says Mr Sutton, a former Marathon Petroleum executive.

The push to establish a Gulf coast crude oil price standard comes as S&P Global Platts, whose North Sea price assessments form part of the physical trading market, is examining whether to incorporate other light, sweet oil streams into its daily snapshots of the north-west European market.

This could include the light US crude oil captured by the Houston contracts, with Platts noting it has seen “regular trade flow” from the region. The Platts Dated Brent benchmark is intrinsically linked to ICE Brent futures, which together help form reference prices for the majority of the world’s seaborne crude trade.

OTC GLOBAL HOLDINGS’ CHOICE! NATURAL GAS ADDS VETERAN TRADER MINDY GERBER AS BROKER

HOUSTON (January 14, 2019) – Choice! Natural Gas, a subsidiary of leading independent interdealer broker in over-the-counter commodities OTC Global Holdings (OTCGH), today announced the addition of veteran trader Mindy Gerber as a broker.

“2018 was a great year for this desk and OTCGH, but we understand that we must continue to add unique talents like Mindy in order to ensure we provide our clients the unmatched market intelligence and service they’ve come to expect,” said Javier Loya, Chairman and Co-CEO of OTCGH. “Mindy’s experience in the natural gas markets as a trader coupled with her ability to advise key industry players makes her a valuable contributor to our Choice! brokering team.”

Gerber brings more than 15 years of experience in commodities trading to Choice! Previously, she worked as a Financial/Physical Trader at Texla Energy, as an East Natural Gas Trader at Enterprise Products and as a Natural Gas Trader at BP. Gerber earned her Bachelor of Science in Marketing from the Indiana University Kelley School of Business.

“I’m looking forward to bringing a different perspective and approach to the Choice! Natural Gas team, having previously approached the market from the trading side,” added Gerber.

For more information about Choice! Natural Gas and OTC Global Holdings please visit www.otcgh.com.

About Choice! Natural Gas

Founded in 2005, Choice! Natural Gas is a portfolio company of OTC Global Holdings and a brokering group of EOX Holdings.  Choice! is a leading broker in Natural Gas Options, Natural Gas Basis, NGL, Refined Products, Electricity, and Weather derivatives.

About OTC Global Holdings

Formed in 2007, OTC Global Holdings has become the world’s largest independent institutional broker of commodities, covering financial and physical instruments from offices in Chicago, Des Moines, Geneva, Houston, London, Louisville, New Jersey, New York and Singapore. The company is a leading liquidity provider on CBOT, ICE, NYMEX and NFX, ranking number one amongst its peers in numerous derivatives contracts across biofuels, emissions, commodity index products, crude oil, natural gas, natural gas liquids (NGLs), metals, petrochemicals and refined products, power, proppants, soft commodities, and weather derivatives. The company serves more than 450 institutional clients, including over 70 members of the Global Fortune 500, and transacts in hundreds of different commodity delivery points in Asia, Europe and the Americas. To learn more about the company, please visit www.otcgh.com or go to https://player.vimeo.com/video/146686709.

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Contact:
Amy Lach
Pierpont Communications
(713) 627-2223
alach@piercom.com

OTC GLOBAL HOLDINGS’ EOXLIVE TO EXHIBIT AT FIA EXPO IN CHICAGO

OTC GLOBAL HOLDINGS’ EOXLIVE TO EXHIBIT AT FIA EXPO IN CHICAGO

Leading independent interdealer broker in over-the-counter commodities’ market data platform has grown its business by nearly 30 percent in 2018, will showcase expanded offerings

Chicago (October 15, 2018) – EOXLive, a wholly-owned subsidiary of leading independent interdealer broker in over-the-counter commodities OTC Global Holdings (OTCGH), will be exhibiting at FIA Expo in Chicago on October 16-18. During the conference EOXLive will showcase its EOXLive Market Data offering, which has grown its business by 29 percent in the last nine months, to attendees along with the firm’s proprietary voice and electronic trading platform EOX Active Markets. In addition, representatives will be sharing some of the platform’s latest market data developments such as newly added Coal and Freight Forwards offerings as well as expanded individual offerings in its various asset classes.

“We are looking forward to informing attendees about the latest updates and offerings available on EOXLive during FIA Expo,” Campbell Faulkner, Chief Data Analyst at OTCGH. “It’s been a tremendous year of growth for this platform, and the conference is a perfect venue to share EOXLive’s latest developments, unique features and technical capabilities, while also networking and building new relationships.”

OTCGH Market Data products draw from the deep liquidity of OTCGH’s breadth of brokerages and leverage the company’s well-known EOXLive broking/trading platform which combines the convenience of electronic trading with voice broking’s unique ability to provide market color and create bespoke transactions.

EOXLive recently added Freight Forward Curves and Coal to its continuously expanding suite of data resources from OTCGH, which includes end-of-day forward curve reports for natural gas basis and power forward contracts each with 120 months of monthly granularity from across hundreds of locations, Natural Gas Implied Volatilities product covering basis options markets data, Power Implied Volatilities covering North American electricity options, Natural Gas Liquids Forward Curves, Power/Natural Gas Forward Correlations, Crude Oil Forward Curves, Coal Forward Curves and refined products forward curves.

For more information or to receive free access to EOXLive, visit the EOXLive booth at FIA Expo (#214),  http://www.otcgh.com/eox or contact EOXLive via email: operations@eoxlive.com, or phone: 877-737- 8511.

About OTC Global Holdings

Formed in 2007, OTC Global Holdings has become the world’s largest independent institutional broker of commodities, covering financial and physical instruments from offices in Chicago, Des Moines, Geneva, Houston, London, Louisville, New Jersey, New York and Singapore. The company is a leading liquidity provider on CBOT, ICE, NYMEX and NFX, ranking number one amongst its peers in numerous derivatives contracts across biofuels, emissions, commodity index products, crude oil, natural gas, natural gas liquids (NGLs), metals, petrochemicals and refined products, power, proppants, soft commodities, and weather derivatives. The company serves more than 450 institutional clients, including over 70 members of the Global Fortune 500, and transacts in hundreds of different commodity delivery points in Asia, Europe and the Americas. To learn more about the company, please visit www.otcgh.com or go to https://player.vimeo.com/video/146686709.

About EOX Holdings LLC

EOX Holdings LLC (EOX) is registered as an Introducing Broker with the National Futures Association (NFA). EOX delivers unique and comprehensive market data, introducing broker (IB) services and the EOXLive platform. EOXLive provides order and trade management, confirms, reporting and clearing for thousands of trader, hedger and market maker accounts. EOXLive Active Markets delivers comprehensive on-screen price discovery while keeping the important human element in the trader and broker relationship. Leveraging the liquidity of nearly 20 brokerage shops across the commodity spectrum, EOXLive customers have transparency and execution capabilities so they can trade like never before. EOX Holdings LLC is a wholly owned subsidiary of OTC Global Holdings.

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U.S. oil sanctions on Iran threaten global supplies, but a demand slowdown poses a real risk

There are still several weeks before U.S. sanctions on Iranian oil actually kick in, but expectations of tight crude inventories already have contributed to much of this year’s gain in global prices. The rise has come despite concerns over potentially lower energy demand and plans by two of the world’s biggest producers to boost output.

“The markets are always forward-looking,” said Tamar Essner, energy director at Nasdaq IR Intelligence. “Exports from Iran are already down about 35%, when you look at crude and condensate [a very light oil] together,” since President Donald Trump announced the U.S. withdrawal from the Joint Comprehensive Plan of Action in May. The deal between Iran and six world powers and the European Union was made to ensure that Tehran’s nuclear program had a peaceful purpose, rather than to make nuclear weapons.

“The market has really been surprised by the degree of enforcement from the U.S.,” Essner said. In the past, she adds, Washington had “targeted reductions in exports” with sanctions, but the current administration has “focused on elimination” of exports from Iran, the Organization of the Petroleum Exporting Countries’ third-largest producer.

Nations such as South Korea have reached full compliance with the sanctions, and “critically, we’ve also seen China already showing signs of reducing their level of imports,” Essner said, noting that a buildup of Iranian oil in offshore storage shows that “it’s been harder for Iran to find buyers.” U.S. allies have until Nov. 4 to end imports of oil from that country.

Since Trump’s announcement in early May through mid-September, the price of Brent crude LCOX8, -0.01% the global benchmark, climbed roughly 7%. It settled at $78.60 a barrel on Thursday, up about 18% since the year began.

“European companies will almost certainly comply with these sanctions to avoid fines and confrontation with the U.S.,” said Sebastian Leburn, senior portfolio manager of Boston Private. “About a third of Iran oil is exported to Europe, and this is where the curtailment will be most pronounced.” Iran’s crude and condensate exports averaged 1.92 million barrels a day in August, down from 2.32 million in July, according to estimates from S&P Global Platts.

Saudi Arabia and Russia have been trying to ensure market stability in the aftermath of the Iran sanctions, but some question their ability to make up for the lost barrels of crude.

In June, OPEC and allied producers said they would rein in production curbs implemented in January 2017. That could raise daily output by one million barrels, to help offset a possible supply shortage from the Iran sanctions and production losses in Venezuela and elsewhere. A committee of OPEC and non-OPEC producers was expected to discuss how best allocate the production increase at a meeting in Algiers on Sept. 23.

However, it’s doubtful that Saudi Arabia or Russia can make up for the lost oil, maintains Campbell Faulkner, a senior data analyst at EOXLive. “Neither country has the swing production it did a number of years ago.”

It’s more likely that U.S. benchmark West Texas Intermediate crude prices CLX8, -0.16%  will spike into the $100 range, prompting production from drilled-but-uncompleted wells to ramp up, “along with greater U.S. exports to ease the tight market,” said Faulkner. That “will not replace the totality of the loss, but it, along with marginal production increases globally, can soak the market to prevent” oil from going into the $130 range.

Iran, however, isn’t the only factor that will help guide oil’s direction.

The sanctions probably will remove 1 million to 2 million barrels of oil a day from the market, and that’s obviously very bullish for prices. But the other big factor is the trade war, which is potentially very bearish for crude, because it could dampen demand, Essner says. Trump has imposed tariffs on, and plans even more, on hundreds of billions of dollars’ worth of goods from China, the world’s largest energy consumer.

The “bigger factor through the rest of the year is likely demand rather than supply,” said Brian Youngberg, senior energy analyst at Edward Jones, and the “real” threat to oil demand comes from the “broader economic downturn in emerging markets as a whole, not just China.”

Read the article online here: https://www.marketwatch.com/story/us-oil-sanctions-on-iran-threaten-global-supplies-but-a-demand-slowdown-poses-a-real-risk-2018-09-20