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U.K. Gas, Coal Markets’ Screen Trading Rises, FSA Says

Dec. 6 (Bloomberg) -- Four out of six European energy markets saw an increase in electronic trading this year, and all experienced increase volume except emissions, according to a survey of energy brokers by the Financial Services Authority.

The U.K. gas and power, European electricity and the coal markets had a rise in so-called screen trading, the FSA said today in an e-mailed report, while the emissions market was unchanged. Non-exchange trading of U.K. gas occurs 64 percent by screens and 36 percent by voice broking, it showed.

There is “a relatively even split between screen and voice trades,” for four of the six markets, the report said. “For the U.K. gas and European power markets there is a slightly stronger preference for screen trading, although voice-brokered deals still remain significant in these markets.”

The European gas market saw a decline in screen trading, though the report also showed that that market had the biggest increase in overall trading volumes over the 12-month period ended July.

European gas trading volumes advanced 52 percent to 168,010 million therms, while U.K. gas gained 33 percent to 438,122 million therms. A therm is 100,000 British thermal units.

Trading Volumes Rise

European power trading volumes climbed 19 percent to 4,884 terawatt hours. The volume data is based on submissions from energy brokers and covers over-the-counter trading from August 2009 through July 2010, not exchange-based buying and selling of energy contracts.

The volume of OTC carbon emissions trading shrank 1 percent to 2.94 billion metric tons, which “may, in part, be due to the success of exchange-traded emissions contracts,” the report said.

The following table shows the percentage of over-the-counter trades that took place electronically, and via brokers, for the six markets surveyed by the FSA. The top line of each table is for trades from Aug. 1, 2009, to July 31, 2010, and the second line shows year-earlier figures in parenthesis.

                  Electronic Platform Trading %

U.K. Gas  /Europe Gas /U.K. Power /Europe Power /Coal /Emissions
   64       48         56           60          49     46
  (63)     (51)       (51)         (45)        (41)   (46)

                    Voice-Brokered Trading %

U.K. Gas  /Europe Gas /U.K. Power /Europe Power /Coal /Emissions
   36       52           44         40          51     54
  (37)     (49)         (49)       (55)        (59)   (54)

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net Lars Paulsson in London at lpaulsson@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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