Macquarie Group's Energy Markets Division (EMD) plans to start a physical oil trading business in Singapore. The initiative follows the successful development of EMD's physical natural gas and electricity trading businesses in North America and Europe, as well as its global physical coal trading operation.
The Australian bank has hired a team of six people led by Stephen Taylor from Masefield AG, an independent oil trading firm based in Zug, Switzerland. Taylor joins as division director and head of physical oil in Asia and reports to David Heard, head of oil & gas Asia.
The team is made up of industry veterans, most with at least 20 years' experience. Taylor has been based in Singapore for the past five years, where he focused on Asia-based trading strategies. Before that he spent 20 years with Shell Group companies in a variety of Asian and global roles within the refining, supply and trading functions.
His team brings knowledge of a range of trading strategies based on low risk intermediation and client service within the global oil trading value chain. Its members also have substantial Asian physical oil experience spanning trading, structured origination, logistics and operations, all according to Macquarie.
In a statement distributed in Asia yesterday, Nicholas O'Kane, Macquarie's global head of energy markets, said: "The team's experience and relationships provide a solid base from which to grow this complementary physical trading opportunity, alongside our well-established global paper oil trading."
"We see a particular opportunity in physical oil trading from an Asian viewpoint, as the region consolidates its leading position based on the growth of substantial new refining capacity, feeding the region's high-growth economies, and taking a greater share of markets as far afield as Europe and the west coast of the Americas," added Heard.
Macquarie has decided to extend its physical presence into oil as a means to differentiate and broaden its client offering, and to support consistent trading profitability based on the underlying physical movement of essential commodities.
The physical oil business expects to begin trading progressively in the coming months as internal regulatory and operational requirements are completed for key jurisdictions in Asia, according to the statement.
EMD is a global sales and trading business of Macquarie's with five sales desks around the world. It participates in the core businesses of physical and financial natural gas, coal, oil, power, and UK utilities. EMD falls within the group's fixed income, currencies and commodities business operation.
