Chief gas trader leaves JPMorgan over differences with firm

Related Blog Posts & Articles
Last Update: 2:02 PM ET Dec 7, 2006


NEW YORK (MarketWatch) -- JPMorgan & Co.'s (JPM) head natural gas trader has resigned after being asked to leave the bank, a person familiar with the situation said Thursday.

JPMorgan spokesman Brian Marchiony confirmed that Parker Drew, head of North American natural gas trading in New York, had left the firm in late November but he declined to comment on the reason for his departure.

JPMorgan was the clearing firm for the energy traders at Amaranth Advisors LLC, the $9.2 billion hedge fund that collapsed in September under the weight of heavy losses from bad natural gas bets. The investment bank then bought Amaranth's gas contracts at bargain prices, as the fund became desperate to unload them so it could return some money to investors.

Drew could not be reached for comment.

Marchiony said Drew's departure had nothing to do with Amaranth's collapse.

"Amaranth turned out to be a good trade for us," he said.
Drew did not leave the bank on good terms, said a person familiar with the situation, who asked not to be named.

The bank has yet to choose someone to replace Drew, Marchiony said.

JPMorgan said the Amaranth deal boosted the company's trading business in the third quarter - particularly the firm's new energy desk, which has struggled in 2006.

"We took on some risk in the quarter," said Michael Cavanagh, JPMorgan's chief financial officer, during a conference call in October with investors. "The results demonstrate we got paid for that risk and have brought our risk back down."

An energy trader at a Houston hedge fund said J.P. Morgan may have lost significant sums this year trading emissions credits - mainly European allowances of carbon dioxide, U.S. sulfur dioxide allowances and U.S. nitrogen oxides allowances.