Market risk
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
Credit watch
Risk management and analytics firm RiskMetrics gives this month’s analysis of energy companies’ credit quality using its CreditGrades tool
Margin notes
Brett Humphreys explains how to measure and manage margin risk, an often-overlooked – yet often-significant – risk exposure
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
US energy prices: in line for a fall?
A combination of concerns in the second half of January 2003 has boosted US oil and natural gas prices to levels not seen since the winter of 2000/2001. Will the higher prices stick? Logical Information Machines examines cause and effect
Exchanges gradually gain pace
After much talk of new trading solutions for German power, only one platform – EEX – has made significant progress, although the new clearing solution from Clearing Bank Hannover seems to be picking up steam. James Ockenden reports
The bigger they come…
The German market is at the heart of the European power business, but it has stuttered since its early promise, and has yet to set the pace for the region as a whole. From a new entrant’s point of view, this is only to be welcomed, argues Ben Tait
Energy clearing – solutions for a changing trading environment
E. Michael Jesch, head of business development at Clearing Bank Hannover, examines the effect of energy market liberalisation, globalisation and recent technological advancement on short- and long-term trading
Option pricing for power prices with spikes
European power prices are very volatile and subject to spikes, particularly in German and Dutch markets. Ronald Huisman and Cyriel de Jong examine the impact of spikes on option prices by comparing prices from a standard mean-reverting model and a regime…
Blurring the lines
A turf war between Atlanta’s IntercontinentalExchange and the New York Mercantile Exchange reveals a shift in the traditional role of over-the-counter brokers and exchanges, finds Catherine Lacoursière
US pipelines follow the market
Todd Shipman of credit rating firm Standard & Poor’s finds that pipeline companies in the US will face more market risk than regulatory risk in the coming year
Enough’s enough
Brett Humphreys takes the guesswork out of determining how many simulations are needed to calculate value-at-risk
Crude oil takes a double hit
Mark Powell of GlobalView Software looks at how crude prices are being affected by the impending war with Iraq and the general strike in Venezuela
US gas market challenges
A new report from the investigative office of the Federal Energy Regulatory Commission finds that competitive natural gas markets in the US are robust, but warns of challenges ahead. Kevin Foster reports
Coal on the rocks
Faced with liquidity problems, falling volumes and uncertainty over the accuracy of price data, coal trading has had many of the same difficulties as the natural gas and power sectors over the past year. How can it get back on its feet, asks Kevin Foster
Structured finance caught off-balance
Efforts by energy and finance professionals to stress the difference between legitimate off-balance-sheet entities and Enron’s opaque devices have had little impact, as US regulators rush to clean up structured finance. Maria Kielmas reports
A clear market leader
How will SunGard’s acquisition of rival vendor Caminus change the market for energy risk management software? Kevin Foster reports