Risk management
The energy equation
Quantitative analysis in the energy industry is undergoing a crucial transition as it moves out of the role of secondary support to sit at the heart of business decision-making. Stella Farrington looks at its advance
Chris Bowden
With energy prices skyrocketing, risk management is now a necessity, not an option, says energy risk pioneer Chris Bowden . By Stella Farrington
Delivering the goods
There’s huge scope for growth in the freight derivatives market, but to attract more players, existing participants need to adopt more innovative and sophisticated trading practices, participants say. Stella Farrington reports
BNP Paribas strengthens energy derivatives team
French bank BNP Paribas has strengthened its commodity derivatives team in New York, London and Singapore, particularly on the energy side.
Nymex, Icap to launch gas, crude oil daily settlement derivatives
The New York Mercantile Exchange (Nymex) and inter-dealer broker Icap are to launch an electronic market in same-day over-the-counter (OTC) options on prompt-month settlement prices for crude oil and natural gas. Starting on Monday (July 18), the…
In pole position
Sakonnet’s Thurstan Bannister says a sound footing in risk management and a customer-facing approach is the secret of his company’s success. By Stella Farrington
Keep it simple, stupid
Do you prefer sophistication or simplicity? Neil Palmer takes a look at optimisation methods in energy modelling and asks if energy quants aren’t sometimes being a little too heavy-handed
Some brokers taking wrong approach to freight, says senior broker
Inter-dealer brokers could be taking the wrong approach by entering the freight derivatives market through joint ventures with physical shipping brokers rather than directly broking physical freight, says a senior energy broker.
Struggling for growth
All three Canadian energy exchanges – NGX, Watt-Ex and NetThruPut – are finding it slow-going with their expansion plans. Meanwhile the rivalry between NGX and Watt-Ex is growing. Joe Marsh reports
The technology trap
Large banks are increasingly looking to energy trading to improve liquidity and develop relationships with large institutional and industrial clients. James Kemp looks at some of the technological challenges they face
Checking outside the box
Companies often use checklists to evaluate their IT buying requirements. But these rarely address what the firm actually needs. Brett Humphreys discusses how over-reliance on checklists may lead to poor software buying decisions
A growing concern
Despite high natural gas prices, Canadian fertiliser maker Agrium has been posting strong profits, while some rivals have struggled. The company’s risk-management strategy has been a significant factor in its success. By Joe Marsh
Risk-adjusted planning
An energy firm’s economic performance can be highly affected by incorrect valuation of implied economic risk. For this reason it is essential to provide management with the correct risk assessment tools. Here we propose a way of introducing risk…
The best of all worlds
Thanks to their varying scale, structure and diversity, European organisations often have very different solutions to risk management. But which system is the most effective? In an exclusive to Energy Risk, the European Energy Risk Forum offers a route…
Training the tiger
Derivatives are finally beginning to gain wider acceptance in Taiwan, but senior executives remain wary, associating them with the collapse of Barings and, more recently, China Aviation Oil’s huge trading losses, finds David Hayes
Evolution to open Calgary office in July
Energy broker Evolution Markets will open an office in Calgary, the centre of the Canadian energy-trading markets, in early July.
Editor
"The FFA market offers enough arbitrage opportunities to have a hedge-fund manager in clover"
Staying one step ahead
Picking the right investment opportunities will never be a precise science, but a combination of global forecasting and risk management has enabled US Global Investors to become one of the most successful US mutual funds in the energy space. Its chief…
The clearing challenge
Growing over-the-counter trade in the energy markets, much of it from hedge funds, coupled with exceptional price volatility, could test the current clearing system to the limit, warns independent consultant Chris Cook
The dragon’s revenge
In the second article on the pitfalls of hedging, Neil Palmer considers one of the risks of managing options: dynamic hedging. He shows there is an awful lot that can go wrong in the quest for perfect risk elimination
North AmericanEnergy Forum
Leading energy market players discuss market trends, credit risk management and the future of the energy sector market, with a special focus on Canada
Stateside summit
Adding to the success of Energy Risk Europe in March, last month’s Energy Risk USA conference raised some lively debate. ERM, credit risk and the problems facing quant analysts were among the hot topics. Oliver Holtaway reports
Freight looks forward
Freight derivatives are increasingly seen as a key risk management tool. Banks and hedge funds are also trading them. But will the growth in liquidity continue, or is this another false start for the market? Stella Farrington reports