Hedging
Clearing exemption too close to call
Exempting commercial hedgers from mandatory clearing could create a loophole for the institutional investors often blamed for driving up commodity prices, according to the chief lawyer for the Commodity Futures Trading Commission (CFTC).
Risk management in vertically integrated energy companies
Once risk management is seen as more than just a control function, the business operations of vertically integrated energy companies present numerous opportunities, especially for hedging strategies. Jaime Román and Santiago Tejero of Endesa discuss
Economic uncertainty adds to challenge of hedging in US power markets
Uncertainty has plagued the US power sector since the financial crisis. Although many believe an economic recovery is in sight, forecasting load growth continues to be a headache for those looking to manage risk in this market. Pauline McCallion reports
Energy structured deals: dynamic vs quasi-static hedging
Traditional pricing and hedging approaches often fail to work properly for complex energy structures due to market incompleteness, liquidity problems or unusual price dynamics. In this article, Stefano Fiorenzani suggests some specific adjustments that…
Interview: Mexico's hedging plans: in crude health
Pauline McCallion speaks to Gerardo Rodriguez, deputy undersecretary for public debt at Mexico’s Ministry of Finance & Public Credit, about the government’s highly successful oil price hedging strategy
Mexico sees return to normality for oil hedging
Banks’ ability to act as a counterparty is “back to a very normal situation” after the credit crunch, according to one of the designers of Mexico’s oil price hedging programme.
Deals of the Year: Credit Suisse
Credit Suisse structures a crack-spread hedge for Alon USA refinery.
Mexico hedges oil price at $57 in 2010
The government of Mexico has hedged much of its 2010 oil exports at $57 per barrel following the successful completion of its 2009 hedging programme, which generated gross revenues of $5 billion.
Corporate statement: Are you re-evaluating your energy risk management provider?
Many energy-price-dependent organisations, such as utilities, independent power producers and oil and gas producers, saw their hedges at risk with the crumbling balance sheets of several key hedge providers. The global credit crisis has forced many…
Market focus: derivatives - Risky business
Companies that are heavy consumers of energy are particularly susceptible to market volatility. For such end-users, proper use of risk management techniques can mean make or break, says Eric Fishhaut of GlobalView
Safe haven
Gold has been a favourite with investors looking for a safe haven since last year’s turbulence began. But will this persist in 2009, or will the precious metal start to lose its shine as a hedging option? Pauline McCallion finds out
Hedge fund technologies
Energy markets continue to attract hedge funds - but, as recent high profile losses have shown, operating in them is challenging. Having the right trading and risk management IT is essential. Stewart Eisenhart reports
The right of refusal
Traders have learned that giving away free financial options can be costly. However, free options can take many forms. Brett Humphreys and Tamara Weinert discuss the value of a risk management option that can easily be given away
Using a square peg
Hedging load exposures is a complex issue, and plumping for hedging the expectedvolume is unlikely to be the best solution. Brett Humphreys and RahulGill showthat sometimes, the best hedge of a shaped position is an over-hedge
US retreat hits European trading
The retreat of US energy firms from energy trading has reportedly hit European volumes hard. But volumes aside, James Ockenden finds that the withdrawal may bring a fundamental change in the market. With additional reporting by Eurof Thomas
Opportunity knocks for smelters
Aluminium manufacturers have long used sophisticated hedging and risk management techniques to protect against fluctuating metal prices, yet they have only recently looked at transferring these skills to power risk management. David Wilson reports
Playing a waiting game
With energy – and particularly natural gas – costs on the rise, are end-users finally coming to terms with the importance of hedging or are they still waiting to get burned before they enter the hedging market? Kevin Foster reports