IntercontinentalExchange sets record power trading volume

By the OGJ Online Staff

HOUSTON, Nov. 13, 2001 — Independent electronic marketplace IntercontinentalExchange Inc. Tuesday reported recording-setting volume in electric power trading.

North American power volumes totaled a record 54 million Mw-hr last week, or nearly 11 million Mw-hr/day, a 34% increase over the October average. Duke Energy Corp. executives noted Monday IntercontinentalExchange has become the market maker for electricity in the Eastern Interconnection within the past 3-4 months.

Intercontinental CEO Jeffrey Sprecher attributed the increase to “uncertainty that has been exhibited in several key energy trading venues over the past several months. There has been a clear shift of energy and metal trading activity during October into Intercontinental markets.”

Sprecher said the rise suggests market participants are seeking more security. Sources have said the industry is turning to Intercontinental, in part, because of market leader Enron Corp.’s financial woes.

North American natural gas volumes for the week were up at 950 bcf, a 13% increase over the previous month’s weekly average, Sprecher said. The number of natural gas transactions, however, was up more than 30%, indicating smaller average trade sizes.

Trading volumes in oil and refined products set a new weekly record of 55 million bbl or 11 million b/d, a 45% increase over the October daily average.

The 13-month-old Atlanta exchange operates as an open-access marketplace and has experienced steady gains in liquidity over the last year, with more than 400 of the world’s largest commodity trading firms now participating.

The ICE electronic trading system is installed on more than 7,000 desktops worldwide and offers traders more than 600 listed commodity and derivative contract types. Products traded on ICE include natural gas, power, crude oil and refined products, precious metals, and emissions allowances.

Contracts include physical delivery as well as financially settled swaps, spreads, differentials, and options based on a variety of fixed and floating price indices.

Earlier this year, Intercontinental completed the acquisition of the International Petroleum Exchange in London.

ICE was founded last year by BP PLC, Deutsche Bank , Goldman Sachs Group Inc., Morgan Stanley Dean Witter & Co., Royal Dutch/Shell Group, Societe Generale and TotalFinaElf SA. Additional partners who helped launch gas trading included Reliant Energy Inc., Aquila Energy Inc., American Electric Power Co. Inc., Duke Energy, El Paso Corp., and Mirant Corp.

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