Articles by Risk Staff
Hedging on the fly
In the first of a series of articles profiling energy users and their risk managementstrategies, we take a look at Texas-based Southwest Airlines, one of the mostactive hedgers in the aviation industry. By Joe Marsh
Northwest in excess
The Bonneville Power Administration’s power buyback scheme to tackle electricity shortages in the US Pacific Northwest in 2001 has worked rather too well. The region was left with bankrupt aluminium producers and a surplus of power that is not proving…
Houston happenings
Regulatory pressures, asset valuation and price reporting were just a few of the topic areas covered at Energy Risk’s USA conference in Houstonlast month. Here Paul Lyon rounds up some of the conference highlights
Made in America
Bank of America has arguably built one of the most successful North American gas trading desks. Here Paul Lyon talks with Eric Nobileau, the bank’s global head of commodity sales
Customerservice
Gas trading technology vendors are finding that continued market volatility is attracting clients keen to manage their exposures. But new entrants are forcing them to pick a model and stick with it. By Paul Lyon
A natural standard
In the first part of a two-part series, Agnes Bizet and KevinWulwik highlightthe main issues to consider when trading under Isda’s European Gas Annex,including a close look at default events
A poor standard
Rating agency Standard & Poor’s has recently released guidelines totest liquidity that could be an efficient probe into company finances. BrettHumphreys looks at how S&P has arrived at its calculations, asks if the liquiditymeasures are too conservative…
Where gas is keener
Fearing its competitiveness is slipping, the Canadian natural gas industry islobbying for pipeline rates of return and tax policies on a par with the US.By Catherine Lacoursière
Reliably informed
Pat Wood, chairman of US interstate energy regulator the Federal Energy RegulatoryCommission, talks to James Ockenden about reliability, regulation, and wherenext for the competitive market in the US
Thomas Brooks
Thomas Brooks, president of Constellation Power Source, outlines his contributionto the Constellation Group’s success. By Joe Marsh
Heroes or cowboys?
Banks and energy companies alike are sceptical about the role that hedge fundsplay in energy markets. Are they really an aid to market stability, or is theirpresence compounding market volatility? Paul Lyon reports
Simulating spots
Abstract: The use of Monte Carlo simulation is becoming increasingly importantin energy trading and risk management. Here, Les Clewlow and ChrisStrickland present the first in a series of articles looking at the implementation of simulationtechniques and…
Nord Pool’s back-up
Nord Pool Clearing is the first pure electricity clearing house to obtain capitalsupport through insurance to cover defaults by its trading counterparties. Areenergy companies set to follow suit? Joe Marsh reports
A history lesson
Abstract: The size of bid/ask spreads in electricity options has both valuationand credit implications. Here, Ted Kury of The Energy Authority shows how toderive theoretical spreads using historical option price data so they can beused as liquidity…
The waiting game
The Italian power market has finally opened to competition, but how long willenergy users have to wait until they can trade on the new electricity exchange? Joe Marsh reports
Fair weather future
Judging from the success of the weather risk market in the Asia-Pacific region,the Chicago Mercantile Exchange couldn’t have picked a more opportune timeto launch Japanese weather futures. By Paul Lyon
EU adopts linking directive...
The European parliament has given the thumbs-up to the so-called linking directiveallowing companies within member states to benefit from emissions projects outsideof the EU. By James Ockenden and Paul Lyon
ESB wins Esso price battle
Esso and Ireland’s Electricity Supply Board entered into a seemingly straightforward15-year contract for the sale and purchase of natural gas in 1999. But the contracthas raised the issue of how to define ‘market price’. By James Ockenden
Isda raises Basel-linked concerns
Bankers have been preparing for the implementation of the Basel II Capital Accordfor a number of years. But Isda says that it is still concerned about the effectthe Accord may have on the commodities markets. By Paul Lyon
Dollar distress
Scottish Power has announced a £400 million cash windfall through its currencyhedging programme. Others have not been so lucky – but everyone is nowwaking up to currency trading. By James Ockenden