Operational risk
Flood of oil ETF investors reshaping market, analysts say
Investors stampeded into exchange-traded funds tied to crude oil futures in early 2015. Analysts say the huge inflows halted the plunge in oil prices, at least temporarily, and enabled significant producer hedging. But not everyone agrees
CFTC’s Massad woos energy firms with Dodd-Frank fixes
US Commodity Futures Trading Commission chairman Timothy Massad stresses the agency will smooth out flaws in the agency's Dodd-Frank Act rules, but sidesteps a question over whether they were rushed
Massad sees exchange role in policing CFTC position limits
US exchanges could stay in charge of granting bona fide hedge exemptions to end-users as part of the new federal position limits regime, CFTC chairman suggests
Applied risk management series: Counterparty risk exposure metrics
The use of static counterparty exposure metrics, which provide an incomplete view of the risk of individual deals and portfolios, may lead risk managers to take decisions with unintended consequences. Carlos Blanco outlines a better approach using…
EU commodity trading firms face capital punishment
Imposing CRD IV capital rules on trading houses, utilities and oil majors carries huge costs and makes no sense
Former enforcement chief takes top job at Ferc
BAML promotes Ahmad to co-head; Coolidge leaves Velite; Black joins Wells Fargo; StanChart loses sales head; Freepoint adds oil traders
Bulgaria power market faces challenges, conference told
Bulgaria's electricity market is being hampered by poor transparency, export fees and market structure, heard delegates at Energy Risk Balkans
Gazprom claims highlight stranglehold over European gas
An EC antitrust probe throws Gazprom's dominance in central and eastern Europe into sharp relief, but will do little to alleviate it
BNP Paribas's Flax calm about impact of regulation
Regulation is making life more difficult for bank commodity desks, but Catherine Flax, BNP Paribas's head of commodity derivatives for the Americas, is keeping a cool head
EU capital requirements worry commodity trading firms
The finalisation of Mifid II in Europe has rekindled a debate over whether commodity trading firms should be subject to capital requirements. Firms are lobbying strongly against the idea, but regulators and the European Commission will have the final say
US shale boom poses challenge to Henry Hub benchmark
Henry Hub, the US natural gas benchmark, is being called a "broken proxy" as the shale revolution boosts production in the northeast US. But potential alternatives, such as Pennsylvania's Dominion South, will find it difficult to seize Henry's crown
Hedge fund case tests Ferc's anti-manipulation drive
A US Federal Energy Regulatory Commission probe into a little-known energy hedge fund has turned into an unusual public standoff. Now, the fund's founders are girding themselves for a long legal battle, which may set an important precedent for US energy…
Practitioners must take risk measures with a pinch of salt
While useful, it is possible to rely too heavily on conventional risk measures such as volatility and value-at-risk – a point made recently by billionaire US investor Warren Buffett. Every aspiring practitioner should know about their drawbacks, writes…
Dealing with stressed contracts in the energy sector
The recent collapse of crude oil prices is inevitably putting many contracts in the energy sector under strain. Ashley Wright and Richard Steenhof of Norton Rose Fulbright explore the legal options available to energy companies that need to manage the…
CFTC sent special calls by mistake, Giancarlo says
Hundreds of special call letters were sent to end-users of over-the-counter derivatives in error, CFTC commissioner Chris Giancarlo says
Oil collapse fails to dent zeal for hub-based gas pricing
In recent years, European buyers of natural gas have pushed strongly in favour of contract pricing based on the continent's gas hubs, rather than more traditional formulas linked to the price of oil. Given the huge drop in crude prices, has this stance…
Financial trading worsened oil plunge – Risk.net poll
Most respondents to a recent Risk.net poll say paper trading had some impact on the recent decline in crude oil prices, but disagree about how much
Icap Energy’s Francis wrestles with regulatory change
Icap Energy's new head of energy and commodities in Europe faced tough decisions in his first few months of the job
Anatomy of a model: Valuation of physical assets
This paper dissects the layers of valuation models for physical assets. While their joint functioning is crucial, the integrity of the layers is not always well understood. Rossen Roussev warns of the trend to over-engineer the parts and mis-model the…
Risk and Energy Risk Commodity Rankings 2015 photos
Winners of the 2015 Risk and Energy Risk Commodity Rankings were honoured on February 19 at a champagne reception in London’s West End. Energy Risk offers a sneak peek
IEA, IEF and Opec probe role of markets in oil crash
The impact of US shale oil, financial speculation and bank commodity exits was high on the agenda at a joint meeting held by the IEA, IEF and Opec in Vienna
Oil indexation battle continues despite oil collapse
Europe’s utilities are still pushing for hub-based natural gas prices amid the recent collapse of crude oil
EU and US position limits will hit the wrong target
Dodd-Frank and Mifid II won't stop market disorder but will penalise hedgers
Bank and investor exodus worsened oil rout, traders say
The role of financial trading in the recent collapse of crude oil has added a new twist to the old debate over the impact of speculation on commodity markets. Did retreating index investors, short-selling momentum traders and risk-averse banks exacerbate…