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Energy Trading and Investing A Traders Guide

Our client portfolio includes trading companies, private equity and institutional backed companies, banks, utilities, emerging technologies and retailers. ION Commodities accelerates your success with a data-driven approach and powerful, award-winning harmonics trading energy and commodities (ETRM and CTRM) trading and risk management solutions. Regardless of your industry, our solutions put you in complete control of energy and commodities value chains, from production and processing through to distribution.

  1. Not all energy trading moves in line with the price fluctuations of the commodity itself.
  2. The lack of storage and other more complex factors lead to very high volatility of spot prices.
  3. Global energy consumption reached 13.86 billion metric tons of oil equivalent in 2018, a figure that has risen by 47% since 2000.

In addition, it’s quite intricate to integrate a P2P network with blockchain technology to uphold privacy. The proposed energy trading platform is proficient in trading energy without fraud, resilient, and actively promotes secure energy transactions by eliminating intermediate costs. P2P energy trading encourages consumers and prosumers to do business directly with each other. In the former centralized energy system, the operators were affected by network congestion and loss of data. Energy trading refers to the buying and selling of different energy commodities such as natural gas, oil, gasoline, heating oil, and even electricity.

Since 2010, we deliver high profile projects for the world’s leading commodity producers, traders, and processors. We work with our clients to configure bespoke and extendable data solutions, enabling their successful digital transformation. End customers that want to mitigate the environmental impact of their consumption could increasingly demand green products in various forms. Commodity players with an understanding of the green premium will be able to unlock arbitrage opportunities—for example, through adjustments to their product blending and logistics processes or through cost optimization.


Remember to stay disciplined, manage your risk effectively, and continuously evaluate and adjust your trading strategies as needed. 1 For example, the Dutch title transfer facility (TTF) gas market is increasingly connected to the Asian LNG Japan/Korea Marker (JKM) spot gas market. These first two components are simple enough, but the last one, congestion is trickier. Congestion is caused by the physical limitations of the grid, namely transmission line capacity. Power lines have a maximum level of power they can carry without overheating and failing.

Natural gas is also traded in the over the counter market, as well as through CFDs. Natural gas also has an active physical market where traders move natural gas through pipelines across the United States. Additionally, some ETFs track the movement of natural gas by holding natural gas futures.

Energy Stocks: Investing in Energy Companies

NGI also produces natural gas forward curves out 10 years, as well as Mexico, U.S. shale, and indicative LNG Netback pricing as part of its larger LNG Data Suite. We believe that our competitive edge comes from our established relationships with financial IT companies and institutions, the breadth of the solutions described and the quality of content. Financial IT provides a detailed map of the everchanging space where the IT provider sector meets the broadly defined financial services sector.

How can I manage risk in energy trading?

Natural gas has been a vital source of energy for centuries, with its first commercial use dating back to 1825 in the United States. Since then, it has become a major player in the global energy market, used for various purposes, including heating, electricity generation, and industrial processes. With its high efficiency and relatively low environmental impact compared to other fossil fuels like oil and coal, natural gas has seen a steady increase in consumption over the years. While public markets do not directly trade renewable energies like wind and solar power, investors can trade and invest in companies and exchange-traded funds (ETFs) related to these sectors.

What are the different energy commodities that can be traded?

Alexander Shishkanov has several years of experience in the crypto and fintech industry and is passionate about exploring blockchain technology. Alexander writes on topics such as cryptocurrency, fintech solutions, trading strategies, blockchain development and more. His mission is to educate individuals about how this new technology can be used to create secure, efficient and transparent financial systems. Game of Trades, a subscription-based platform offering market analysis and trading signals, is one such service. In this review, we’ll assess its features, pros, and cons to determine its value for your time and money. One of the major drivers of energy asset prices is the balance between supply and demand.

The agency believes the increase in electric cars will be a headwind for oil growth and drive electricity growth. The EIA believes that by 2040 there will be 330 million electric cars on the road up from an estimate of 300 million in 2018. This scenario has played out as coal consumption to generate electricity that has dwindled while solar and wind electricity generation has increased. The DOE sees natural gas production averaging 89.8 BCF per day down 3% year over year from 92.2 BCF per day.

The “Marginal” means that the price is set by the cost of delivering one more unit of power, usually one megawatt. Open an account to start trading on the price movements of energy stocks through spread bets and CFDs. However, China and India will have to make key decisions about the issues of nuclear energy programs, ethanol production, and coal-fired power plants as these decisions could impact the prices of these commodities greatly. Over the course of 2023, the pace of demand growth outside of China slowed significantly, to around 300 kb/d on average during 2H23.

You can open a position based on whether you think the price will rise or fall, and depending on which way the markets move, this will result in profit or loss. The energy market covers a number of products, including oil and gas, renewable energy and electricity. There are also many different stages within the process of trading energy, such as the development, production and shipment of the product. Energy commodities such as crude oil are often sold on wholesale markets, whereas electricity sales usually come from a direct power plant that is owned by a producer.

If you want to get started with trading energy stocks, energy commodities or energy ETFs, you may want to first start practising opening and closing positions in a realistic trading environment, without the risk. By creating an obligation free demo account with VT Markets, you can do just that. Once you’ve set up your demo account, you’ll have 90 days to get to know the energy trading market, and begin to understand the way different factors move the price for energy commodities like oil CFDs, energy company stocks and more. With so many major corporations in the energy sector, energy trading via related stocks is a popular way to get involved in the market. This movement towards renewable energy has also been affected by the stability of the global market.

Molecule also offers specialized add-ons for physical power and enterprise cryptocurrency trading. AG2 was founded to accelerate innovations in global weather and environmental insights for risk management. AG2 Trader (formerly WSI Trader) is the world’s leading weather decision support platform for energy trading.

Getting the most out of existing power plants is a serious contribution to sustainability. KWA Analytics is a Global Advisory firm specializing in delivering Trading & Risk Management business and technology solutions for clients in the Energy, Commodity, Treasury and Capital Markets. If it’s reliable off-grid Energy that you need, we’ll keep you powered-up onsite with our solar array, battery storage, and budget-conscious Microgrid solutions. With our proprietary auction platform, it allows you to bring buyers or sellers to an online marketplace competing for your business while also providing last-look technology that ensures you get the best market price possible. WISTA Switzerland is a key global shipping and trading hub, with regional clusters in the Geneva Lake area, Zug/Zurich and Locarno.

nicvosEnergy Trading and Investing A Traders Guide