This has been a difficult year for trading platform operators who have faced extreme price volatility – including negative oil prices – and new ways of working remotely from their clients.
But Bloomberg’s commodities e-commerce (CMET) flourished under these conditions, receiving high praise from users and winning the commodities trading platform of the year at the Energy Risk Asia 2020 awards. Over the past year, Bloomberg has added some of the biggest companies energy and metals sector to its user footprint, while helping customers address a range of regulatory and Covid-19 challenges.
âThe past 12 months have been difficult for the commodities market, which has seen unprecedented market volatility, collapsing demand and declining trade flows,â said Emilie Gallagher, Global Head of Commodities and FX product. “Despite these challenges, our customers were able to trade from home smoothly and without interruption, even when crude oil prices were negative.”
One of the main differentiators of Bloomberg’s commodities trading platform – and something users say they appreciate – is the fact that anyone with a Bloomberg terminal can activate their entire workflow and connect to everyone. its accounts, as well as access to prices, fundamental data, research. and business intelligence.
Price information comes from a wide variety of sources including stock exchanges, commodity brokers, price information agencies, and other market-based organizations. Information is available in all sectors, including: petroleum, natural gas, electricity, base and precious metals, agriculture, shipping, coal, carbon and renewable energy.
Bloomberg users have the ability to research fundamental and statistical commodity data points on inventories, inventory levels, and supply and demand. Terminal subscribers also praise the access to Bloomberg News coverage of breaking news and market developments and the ability to customize alerts and news filters, which help identify issues. opportunities.
Bloomberg CMET The service replaces tedious manual processes and allows businesses to easily request, receive and record real-time prices from preferred counterparties. Through an RFQ process, customers can execute and confirm transactions and seamlessly integrate details into order management, risk management, and back office systems. The combination of all these features makes it easy and quick for commodity professionals to use one system for all their needs.
All of this has led to notable victories in the Asia-Pacific region in 2020, including Indonesian oil and gas company Pertamina, which uses CMET execute and analyze its new hedging program. In addition, one of the largest European automakers and its banking counterparties in China are using the Bloomberg solution for its new metals hedging program in Asia.
For Pertamina, one of the greatest attractions of using CMET for the bidding and execution of its hedging program was the audit trail provided, says Sani Saifuddin, head of crude trading at Pertamina. âIt’s really helpful for us to have everything recorded and to have it handy when the listener needs to see it,â he says.
The platform has also proven to be robust in the face of unprecedented price volatility and negative oil prices. As West Texas Intermediate crude futures fell to minus $ 40 a barrel on April 20, many traders rushed to research pricing models that could explain the negative prices.
Gallagher said being a part of Bloomberg was very useful during this time. âBloomberg has a whole team dedicated to option pricing, so we had the ability to quickly price negative oil,â she recalls.
Another huge challenge posed by Covid-19 has been the sudden transition to remote working. Bloomberg worked with users to access their Bloomberg terminals from their homes. Bloomberg’s secure instant messaging connectivity between dealers and customers also proved very useful around this time, Gallagher said.
The company continues to develop and expand the product. âWe will continue to innovate in our product offering by adding new features to help global customers with market transparency and trading efficiency,â said Gallagher.