Market risk
BarCap launches commodity-linked credit product
Fixed-income investors can now make use of a credit instrument that provides access to commodities as an asset class, says Barclays Capital. The investment bank has launched Apollo, a collateralised commodity obligation (CCO), which uses derivatives…
Mirant settles price-reporting charges
A subsidiary of Atlanta-based energy company Mirant has settled charges with the US Commodity Futures Trading Commission (CFTC) of false reporting of natural gas prices. The commission found that Mirant Americas Energy Marketing (MAEM) traders made false…
Ten years of trading
As an analyst and software designer who has spent the past ten years working closely with energy markets, Sandy Fielden had no problem identifying what had the most impact on his world in that time – technology. A regular Energy Risk contributor for some…
AsiaRisk Awards
Here we feature two outstanding winners from our sister publication AsiaRisk’s Annual Awards, published in October. Thanks largely to Macquarie Bank, alternative investments are gaining a real foothold in Australia, while Westpac has been instumental in…
The famous fifty
To celebrate Energy Risk’s 10th birthday, we have created the Energy Risk Hall of Fame: a group of individuals whose commitment and contribution to energy markets makes them a foundation of this business. Introduced by James Ockenden
The Energy Risk Team
The Energy Risk team of 2004 (above) wishes to thank its loyal readers, advertisers, sponsors and contributors for supporting the magazine through 10 years of tremendous market development. James Ockenden looks back over its history
Evolution in energy
The price of oil has undoubtedly been the top story in the energy sector overthe past year or so, but examined over a period of 10 years, the picture looksmore stable. If there’s one trend that has changed the energy markets inthe past decade, it has to…
Benchmark in limbo
The development of a spot market for crude oil in the 1980s eventually led to oil futures trading and the need for benchmark pricing. With oil prices fluctuating wildly in the region in tandem with markets across the globe, theneed for price transparency…
Trading techniques
Merchant generators make daily decisions on how to get the most from their assets.How much capacity should be sold in the day-ahead market and how much shouldbe set aside for the hourly market are seldom-studied but thorny questions. ShulangChen looks at…
Merrill Lynch sees oil staying high in 2005
The oil price, which has roughly doubled since the start of 2000, and risen by over 60% this year, is likely to remain historically high in 2005 due to a structural shift in the market, said Robin Batchelor, co-fund manager of Merrill Lynch’s World…
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Balanced buying
Yijun Du and Xiaorui Hu present a general framework for applyingmodern portfolio theory to optimal natural gas procurements.They showthat successful natural gas procurement involves determining the optimalallocation between fixed-price and floating-price…
UK traded gas market: What with liquidity?
The last two months have been a difficult time for UK gas traders; but Philippe Vedrenne and Marc Lansonneur from Gaselys say conditions will improve, leaving a market that may be stronger than ever
Trading techniques
A majority of merchant power plants built during the last few years in the US are combined-cycle units fired by natural gas. This article discusses asset-backed trading strategies for a merchant single-block power plant, showing how unit dispatches can…
Ending the acrimony
Most utilities support hedging to mitigate price volatility, but are not sure how to communicate the benefits of hedging to their customers. Tim Simard of RiskAdvisory offers suggestions for improving the rate-hearing process
Changing of the guard
Changes to the European gas market may further attract financial players, and tighten the rules in case of physical supply disruptions. Meanwhile changes in the UK gas market may lead to clearing at the hub. By James Ockenden
Getting physical
Asset-backed trading strategies usually employ a combination of physicalpositions, which are subject to physical risk; and financial hedgingintruments, which are not. Here, Steve Leppard shows how value-at-risk,applied to this combined risk scenario, can…
China Aviation Oil hid US$390m derivative loss in struggle to survive
China Aviation Oil’s trading unit, China Aviation Oil (Singapore) Corp (CAOSCO) hid an initial US$390 million loss while its directors sought “white knights” to save it from liquidation, it emerged yesterday as the company announced an estimated US$550…
Calpine trades up
US power company Calpine installed a new trading floor this year due both to its own growth and its aim to provide more companies with energy services. Joe Marsh reports
Caring competition
What are the theoretical consequences of restructuring electricity markets on emissions? Here, Benoît Sévi shows that changes in supply and consumption and restructuring for competition has environmental effects, and argues that strong public policies…
Editor
"The good people buying and selling energy have once again been shafted by corporate greed"
The perfect balance
For most governments, hedging oil price risks on the financial markets is not impossible. But it is politically difficult. Most find instead opt for establishing ‘rainy day’ stabilisation funds. By Maria Kielmas
Volatility conspiracy
The concept of volatility is universally used by quantitative analysts. But is it a concrete idea or a false friend? And does it even exist? Energy quant Neil Palmer takes a look at its mysteries