Risk management
Energy evolution set to reshape risk management
During the next 20 years, the energy industry is expected to undergo transformational technological change, shaking up traditional patterns of correlation between different energy markets and creating demand for new types of instruments and more…
BAML to clear US dollars for BNP commodity finance unit
BAML is to undertake US dollar clearing for BNP Paribas's commodity trade finance business, as it faces a one-year US dollar clearing ban imposed as part of a $9 billion settlement on sanctions violations
JP Morgan commodity heads reveal plans for the future
JP Morgan sold its physical commodities business to Switzerland-based Mercuria in October, a major retreat after years of aggressive expansion in energy and metals. But in an exclusive interview, the bank’s new global co-heads of commodities tell…
Low volatility boosts interest in coal derivatives
Rising activity at commodity trading houses and hedge funds is contributing to high trading volumes in coal derivatives, while some producers are also increasing their involvement in the market
Former CME Group energy head Morsches to leave
Gary Morsches, the New York-based former head of energy at CME Group, is to leave in early 2015, following the appointment of Martin Fraenkel as global head of energy
Mercuria deal was driven by economics, says JP Morgan
JP Morgan's global co-heads of commodities, John Anderson and Michael Camacho, say the bank's decision to sell its physical commodities business to Mercuria was not down to regulatory pressure
Robust valuation and hedging of tolling agreements and physical assets
Krzysztof Wolyniec shows how very robust valuation bounds of tolling agreements can be obtained without modelling the dispatch process or the underlying price process. This flexible method, which uses martingale duality, provides a reliable valuation…
US airline wins Dodd-Frank real-time reporting delay
CFTC no-action letter giving Southwest Airlines and its dealers extra time to report hedging trades in long-dated oil may lead to broader relief for other hedgers in illiquid markets
Credit Suisse sheds top metals trader and Emea sales chief
Veteran salesman Kamal Naqvi leaves metals trading and European commodity sales roles following Swiss bank’s decision to wind down commodities business
Vote now in the Energy Risk Commodity Rankings
Voting is open in the 2015 Energy Risk Commodity Rankings, which rank the top dealers and brokers in the global commodity derivatives market
Commodity leveraged ETFs: Tracking errors, volatility decay and trading strategies
Commodity exchange-traded funds (ETFs) and their leveraged counterparts are a significant part of the growing ETF market. Kevin Guo and Tim Leung examine their tracking performance, with a focus on the phenomena of volatility decay and realised effective…
Quant ideas: Liquidity in commodity risk management
Limited liquidity is a problem that arises frequently when managing large assets, such as power plants or storage facilities. Krzysztof Wolyniec shows how standard financial models tend to overstate the cashflows of these facilities and explains how…
Energy Risk Asia Awards: photo gallery of winners
The Energy Risk Asia Awards celebrate excellence across the region’s commodity markets. On September 23, this year’s crop of winners were presented with their trophies at a glittering gala dinner in Singapore
The secrets of successful energy trading firms
The energy trading world has seen various companies come and go over the years, including utilities, commodity trading houses and banks. Some of those firms have proven to be phenomenally profitable, while others have not. What is the recipe for success?…
Energy trading: veterans reflect on highs and lows
Celebrating Energy Risk’s 20th year, Vitol’s Christopher Bake and Icap’s Paul Newman spoke to editor Mark Pengelly about the history of the energy market and current trends on stage at Energy Risk Summit Europe in October
Mercuria appoints top team following JP Morgan sale
CME Group cuts global headcount by 5%; Deutsche oil trading heads depart; NextEra hires Barclays's Jee; EDF appoints Goldman sales head; Radhakrishnan leaves CFTC
Energy traders ignore legal risk at their peril
Legal risk is a challenge for energy trading organisations, as it eludes traditional quantitative risk management techniques. But its effects can be just as disastrous as other risk management failures, and sometimes worse, warns Vincent Kaminski
Looking back: Chaos ensues at IPE amid protest
Open-outcry trading at the IPE was halted in February 2005 amid a lively protest by Greenpeace activists. The timing was ironic, as Energy Risk reported the following month
EU regulation and renewables seen as big energy risks
Senior risk managers chart biggest concerns for energy companies during panel at Energy Risk Summit Europe, but not everybody agrees the lists are useful
Energy traders must adapt or die, warns E.on risk head
Challenges such as regulation, declining volatility and renewables are making life tough for energy traders, says E.on Global Commodities CRO, but the industry will find solutions
Nothing new about bank commodity exits, history shows
The recent exodus of banks from the commodities business is not a first. Alexander Osipovich looks back at the turbulent history of banks quitting the commodity markets, only to come piling back in a short time later
OTC energy derivatives did not cause the crisis
Over-the-counter derivatives were blamed for the financial crisis, but now the conversation must turn to finding solutions, not apportioning guilt
Energy Risk Asia ETRM Software House of the Year: OpenLink
The software needs of Asian energy trading firms are growing broader and more sophisticated, and vendor OpenLink is eager to respond
Energy Risk Asia Research House of the Year: SG CIB
SG CIB’s Asia commodity research team is developing investable indexes that are popular with Asian clients, as well as supplying timely and relevant trading ideas