Articles by Risk Staff
The sum of its parts
One can view a corporation’s individual projects as a portfolio of options – useful risk management tools to be used if their risk/return ratios are better than that of the firm as a whole. But how to work out the equity cost of capital at this…
Hanging on at the top
This year’s User Choice Awards demonstrate that quality counts. In a fast-changing market, the top vendors and packages have managed to stay ahead of the pack. But the winners cannot rest easy. With IT budgets deflated, it’s a competitive market, and…
The swap terminator
Multilateral swap cancellations look set to become commonplace in the energy sector, thanks to a service from TriOptima, which has just terminated its first round of oil swaps for six firms. Joe Marsh reports
Rankings 2005
The energy markets gave corporates and funds plenty to think about in 2004 – and while the banks still dominate the rankings, some sectors have been taken over for the first time by energy companies. All is revealed in this year’s comprehensive round-up.
Exceptions to the rule
With commodity markets set to fall within the scope of more EU regulation, trade associations are concerned that this extra burden on market participants could stifle trade. By Stella Farrington
A bid for power
Clock auctions are a fairly recent method for utilities of procuring electricity from suppliers, but only New Jersey has an established process. Yet Ohio and Illinois are showing interest. Joe Marsh reports
Layers of intrigue
The Yukos saga – up to now largely confined to the political and legal arenas – recently took a step closer to the physical oil markets with a $6 billion oil deal between China and Russia. By Stella Farrington
Real-time trading
In an efficient, real-time power market, low-cost generation units are dispatched ahead of those with higher operating costs, and the market price reflects balanced generation and load. Here Shulang Chen discusses the basic functions of a real-time…
The experts excel
The fast and furious energy markets gave corporates and funds plenty to think about in 2004 – and while the banks still dominate the energy rankings, some sectors have been taken over for the first time by energy companies. By James Ockenden and Joe Marsh
If the cap fits...
Legal compliance seems the only way to achieve cuts in carbon dioxide emissions. Europe is leading the way, but the US is some way from a similar approach, despite a regional initiative sparking some interest. Joe Marsh reports
The basics of basis
Basis plays an important role for trading in the very complex US natural gas markets: spot will differ from the benchmark Henry Hub New York Mercantile Exchange price on the same day. Eric Fishhaut describes how the basis works and demonstrates the…
Smoke without fire
The market for US financial coal swaps may be starting to show a little potential, but some major obstacles still remain before it catches alight – not least a widely accepted price index. By Joe Marsh
Correlation: the horror!
The murky world of correlation, with its many pitfalls, represents a black hole in the minds of some energy market professionals. But, says Neil Palmer , you needn’t be afraid of the dark
A good bet for 2005
2005 is forecast to be a tough year for many hedge funds, but the saturation of some of their traditional markets could prove a boon to the energy sector, finds Stella Farrington
Crude imitation
Hedging Canadian heavy crude oil is difficult: unlike Canadian light crude, ithas no closely matching price benchmarks. Trading basis differentials is onesolution, but help may be at hand from another quarter. By JoeMarsh
TriOptima trims six companies' oil swap portfolios
TriOptima, a Swedish company dedicated to reducing over-the-counter swap portfolios, has expanded its service into energy. The company has terminated its first group of multilateral OTC oil derivative swaps, with six companies eliminating unnecessary…
Pay as you go
It is going to be a hard day at the office for Joe Risk Manager. The risk management committee might welcome his new risk charge system, but how would the traders take it? By Brett Humphreys and David Shimko
Bridging the gas gap
Volatility in the natural gas markets shows no sign of any let-up, which means that managing basis risk at Henry Hub continues to spur demand for increasingly innovative derivatives products. Catherine Lacoursiere reports
Blending the rules
The speed of decline of North Sea crude raises fresh concerns over the suitability of the North Sea as a benchmark, and to worries over the value of long-dated derivatives contracts. By Stella Farrington
A new breed of bond
Issuance of rate reduction bonds by utilities may be down, but the market is preparing for a surge in new asset-backed securities derived from the stranded cost model. By Catherine Lacoursiere
James Cameron
As the EU steps up efforts to tackle climate change through the EU ETS, James Cameron, CEO of Climate Change Capital, talks to Stella Farrington
Editor
“With a peaceful mind I face all the crimes alleged against me; I blame myself for errors made...”
A hard nut to crack
This year has proved profitable for US oil refiners, but it could have been even better, had they not posted losses from forward product sales. Are refining companies learning from their trading mistakes? Joe Marsh reports