Hedging
Power plant hedging strategies
A comparison of common delta-hedging strategies and calculations finds that simple formulas used to calculate delta hedges can lead to severe biases. Cyriel de Jong, Hans van Dijken and Alexandra Bundalova suggest a relatively fast, but more accurate…
US natural gas hedging: 2012 outlook
Pauline McCallion speaks to natural gas producers and consumers about what’s on the radar that might affect their hedging strategies this year
WTI-Brent spread volatility disrupts hedging programmes
Jet fuel prices have been tracking Brent more closely than WTI, raising questions about the hedging strategies of US airlines. Alexander Osipovich reports
Companies cautious on hedging in headline-driven energy markets: consultants
Energy-intensive companies are reluctant to pursue aggressive hedging programmes in the current market environment, where headlines are having a disproportionate effect on prices compared with the fundamentals, say consultants
Gas users lock in low long-term prices
Long-term price risk management deals are becoming more popular with utilities and regulators as a way to lock in low natural gas prices
Sponsored Q&A: BNP Paribas
Volatility and anticipated quantitative easing have left commodity players struggling to make sense of the markets. Frederic Hervouet, head of commodity derivatives for Asia at BNP Paribas in Singapore, sheds light on what we can expect from Asian…
More clarity needed over commodities clearing in Europe
European regulation aimed at driving more commodity derivatives trading through clearing is causing concern among small and medium-sized energy companies that don’t yet know if they will be exempted from the requirements. Gillian Carr reports
Q&A: Kwame Okyere-Mensuo, Ministry of Finance and Economic Planning, Ghana
Kwame Okyere-Mensuo, technical adviser at Ghana’s Ministry of Finance and Economic Planning, talks about the country’s pioneering import hedging programme, as well as the hedging of output from the Jubilee field
The rise of sovereign commodity risk management
The unprecedented commodity price volatility of the past four years has led to a surge of interest from governments in risk management strategies. Investment banks are in talks with sovereigns worldwide on setting up financial hedges, and say uptake is…
Q&A: Gerardo Rodriguez, Mexico's Ministry of Finance and Public Credit
Gerardo Rodriguez, deputy finance minister at Mexico’s Ministry of Finance and Public Credit, speaks about the government’s oil price hedging strategy
Mexico’s hedging programme gears up for 2012
This week Mexico’s Congress will begin to debate the price at which the country hedges its oil exports next year
Mexico driving put skew in Brent, say brokers
The put skew in Brent crude oil is close to its yearly high. This is being driven by the hedging programme of Mexico, as well as more general risk aversion on macroeconomic worries, according to brokers
Energy end-user hedging: BASF's Gonzalez
Alejandro Gonzalez, senior commodities risk manager at the chemicals giant BASF, spoke at Energy Risk USA 2011 in Houston about his approach to hedging in a volatile environment
Energy experts eye Dodd-Frank tech benefits
Data reporting systems may be far from Dodd-Frank friendly in the energy sector, but experts say users are likely to benefit once they are up and running
Position limits will feed risk into real economy, say energy companies
Energy market participants have expressed doubt that European position limits proposals will achieve reductions in market volatility, and warned of unintended consequences for end-users' risk management
S&P: Negative hedging outlook for nat gas producers
High natural gas supply, weak prices to continue; non-investment grade producers to suffer as current hedges roll off
Time runs out for position limits comments
CFTC’s latest position limits plan attracts thousands of comments; opinion deeply divided; new commissioner to affect final vote
Sponsored Q&A: JP Morgan
Investment banks are having to adapt as the commodities environment changes in the Asia-Pacific region. Managing Director and Chief Executive Officer of the Global Commodities Group for Asia-Pacific, Ray Eyles, explains how JP Morgan is expanding its…
US power M&A: lively activity expected in 2011
Dynegy’s deal-making efforts may be floundering, but the outlook for the rest of the sector is that mergers and acquisitions activity will flourish in 2011, finds Pauline McCallion
Cutting edge technical: Carbon derivatives pricing
In carbon dioxide equilibrium models, permit prices are positive and bounded by the penalty level. To obtain closed-form solutions to the pricing of carbon dioxide derivatives, Daniel Bloch models the permit price as a function of a positive unbounded…
Solid growth expected for Asian coal markets
The market reaction to the supply problems caused by the La Niña weather pattern has illustrated how robust the Asia and Asia-Pacific coal sector is becoming. Alex Davis examines the scope for growth in both physical and derivative markets in the region
El Al enhances risk management and hedging operations
Israel’s national airline tightens up on the way it hedges jet fuel risk and currency movements