Short-term natural gas trading is becoming increasingly important due to diversified energy production and rising demand. While power trading companies have already successfully begun to focus on automated trading algorithms to improve their performance and reduce their costs at the same time, trading in natural gas is lagging behind. Purchases, sales and forecasts are largely manual.
When it comes to changes in production, transportation or demand, time – response time – is literally money.
Even if the gas market involves trading of far fewer products than the power market, making prices more stable and trading easier, gas also experiences changes in production, transport or demand. Significant short-term price fluctuations included.
Then time – reaction time – is literally money. Gas traders benefit from the high speed of trade by purchasing or selling the raw material at a better price, thereby strengthening their competitiveness. A fully automated algorithm is always faster than manual trading. In addition, it works around the clock and can thus take advantage of all market opportunities without incurring high personnel costs for night work. According to information provider VisoTech, Periotheus autoTRADER is currently the only fully automated solution that supports spot trading of gas on the most important European gas trading platform PEGAS – in addition to the major power exchanges in Europe. Critical factors such as supply, storage and transport capacities, as well as conditions that influence demand, are taken into account through various parameters and limits that the trader can adjust to maintain full control over the trading process and the big picture. This allows storage and transportation capacities, as well as measures to adapt gas to a forecast supply or demand, to be utilised so that trading can take place at the best price for the gas trader.
A fully automated algorithm works around the clock and can thus take advantage of all market opportunities without incurring high personnel costs for night work.
Nevertheless, the algorithm still takes into account the specific limitations and requirements of the gas and power markets. Periotheus autoTRADER prepares companies for gas trading in an increasingly demanding and increasingly digital market – and offers traders the option of developing their own trading algorithms to keep pace with the rapid rate of change and to remain competitive. CH4
Article published in CH4 on October 8, 2018. © sig Media GmbH & Co. KG
The original article (in German) can also be downloaded in PDF format.
About CH4 – the magazine for the modern gas industry
Gas, as the highest-quality energy source in the fossil fuel family, will certainly be irreplaceable for a long time to come. Nearly 80 percent of all German households are currently heating with gas, and gas is an indispensable component of the energy mix in industry and power production. However, gas is of vital importance not only as a primary energy source: as a bridge technology, the gas industry can make a decisive contribution to the success of the energy transition and securing the supply of the future. Power to gas and sector coupling are already examples today.
But the gas industry will change. The challenges facing supply networks as a result of digitialisation, the necessary modernisation and continuous expansion are considerable. The required transfer of expertise to the heating industry is becoming more complex and, last but not least, it is important to communicate the visions and capabilities of the industry to society. This requires a new medium: CH4 – neutral, independent of associations, market-oriented.
CH4 covers the following topics:
- Maintenance and monitoring
- Network expansion
- The heating industry
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