Glencore is building out a US natural gas trading desk run largely by veteran ex-BP gas traders as market volatility creates lucrative trading opportunities and BP struggles with plunging profits and rumors of an acquisition by rival Shell.
The Switzerland-based commodity trading house in the last two years has hired at least five traders who previously worked at BP for its Houston-based US gas trading team, according to people familiar with the matter. Joe Whelan, formerly a senior gas trader at BP, is heading up Glencore's US gas trading team, the people said. Other hires include CW McCullagh, Todd Donewar, Katie Dollinger Adam and Devon Dulan, whose LinkedIn profiles show they last worked as gas traders for BP for 18 years, 17 years, 15 years and three years, respectively.
Glencore ramped up its US gas trading last year after a decade-long hiatus, having bought and sold 35 Bcf (990mn m³) and 33 Bcf of gas in 2024, respectively, according to filings with the US Federal Energy Regulatory Commission (FERC). The federal regulator mandates disclosures of annual US gas purchases or sales exceeding approximately 2.1 Bcf, so the fact that Glencore did not disclose its US gas transactions from 2013-2023 indicates minimal trading activity during the period. In 2012, Glencore bought 3.8 Bcf and sold 580mn cf, down from its 2011 purchases and sales of 20 Bcf and 24 Bcf, respectively, and 2010 purchases and sales of 72 Bcf and 53 Bcf, respectively.
Glencore earlier this month finalized an agreement to purchase 2mn t/yr of LNG for 20 years from Commonwealth LNG's planned 9.5mn t/yr export terminal in Louisiana, as well as equivalent gas supply from US private equity firm Kimmeridge.
Glencore declined to comment for this story.
The New York-based quantitative trading firm Jane Street has also been muscling its way into US gas trading as it seeks to exploit increased price volatility, sources said. Jane Street Energy Marketing bought 17 Bcf and sold 15 Bcf in 2024, four times its purchases and sales in 2023, which is as far back as the proprietary trading firm's gas trading-related FERC disclosures go.
BP, one of the largest US gas traders by volume, bought 2.4 Tcf and sold 2.5 Tcf in 2024. The UK major has been struggling lately with sharply lower profits, cutting share repurchases and pledging a "fundamental reset" of its strategy as its chairman announces plans to step down and Shell is rumored to be considering an acquisition of it.
US gas enters 'era of volatility'
Average historical 21-day volatility at the US benchmark Henry Hub index from 2020-2024 more than doubled from the 2014-2019 period, according to an Argus analysis.
US gas markets are expected to remain volatile in the coming years as booming US LNG exports place greater pressure on the US' stagnant gas storage and pipeline capacity. Geneva-based trader Mercuria last year invested in a greenfield gas storage project in Louisiana, one of the two US states alongside Texas where the entirety of planned US LNG export terminals are sited.
EQT, the second-largest US gas producer by volume, in April said it was planning to lock in a smaller share of its output with financial derivatives because it wanted more exposure to price spikes. The "era of stability" from 2014-2019 has made way for an "era of volatility," characterized by insufficient gas pipeline and storage infrastructure and an increasingly globalized gas market, all of which are expected to cause gas prices to "swing between extremes," according to an April investor presentation by EQT. More exposure to "asymmetric ‘fat tail' volatility," in which prices are more often either very high or very low, results in higher average price realizations than if it were to lock in "median-like" prices through hedges, EQT said.
