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Goldman Sachs now bigger gas trader than ExxonMobil.

Goldman Sachs is buying and selling enough natural gas to make it one of the key players on the market, even reportedly overtaking oil major ExxonMobil and Chevron and emboldened enough to call an end to the supply glut.

According to a recent regulatory filing, Goldman Sachs bought and sold 1.2 Tcf of physical gas in the United States during 2015, which equates to 25% of the country's residential consumption and more than double its 2013 volumes.

These figures turn Goldman Sachs and its J Aron commodities division into the seventh-largest gas marketer in North America. Goldman Sachs entered the natural gas selling market in 2010 with acquisition of Canadian Nexen's North American natural gas marketing operations.

"The fact J. Aron's business is growing despite low volatility in physical natural gas markets is noteworthy. Many players have downsized," said Tom Russo, an energy consultant and former official at FERC, told the Financial Times.

J Aron dealt 3.42 Bcf7d in 2011, but volumes in North America rose by 7% to 5.86 Bcf/d last year, according to Natural Gas Intelligence. With its status as a new natural gas trading giant, Goldman Sachs has also come out with a bold statement that the supply glut is now over. Sachs attributes the flip to a deficit in part due to Canadian wildfires and pipeline attacks in Nigeria saying, "The physical rebalancing of the oil market has finally started." Goldman Sachs has raised its U.S. crude forecast to $50 a barrel for the second half of 2016.

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Title Annotation:IN THE NEWS
Publication:Pipeline & Gas Journal
Date:Jul 1, 2016
Words:257
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