Operational risk
Coal derivatives activity rises in Europe and US despite differences
The market for coal is being drastically reshaped by changes in the pattern of global supply and demand. In both Europe and the US, this is causing an increase in coal derivatives trading, albeit for different reasons. Gillian Carr investigates
Cutting edge: Hedging price and volumetric risks of fixed-price load-serving contracts in natural gas markets
In this article, Ning Zhang and Robert Cumbie propose a utility maximisation method for natural gas marketers to find optimal hedging strategies to deal with price and load uncertainty by using price and weather derivatives. Monte Carlo simulation…
Railroad indexing to API 2 could help US coal exporters manage risk
Link to API 2 could make exports look more attractive and reflects growing participation in coal market by US firms
PRAs push back against potential EU rules on benchmarks
Price reporting agencies among the most vehement critics of potential EU rules on benchmark indexes
Low crude volatility to bolster spread trades, say analysts
Market participants expected to shy away from outright bets on crude oil as low volatility persists
'Uneconomic trading' at issue in Barclays power dispute
Barclays seeks to defend itself against power market manipulation allegations by contesting regulator’s pursuit of uneconomic trading
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The art of creating a corporate energy hedging programme
Risk managers and consultants say hedging corporate exposures to energy prices is more art than science. As a result, the development of a truly successful hedging programme requires several important questions to be carefully considered. Jay Maroo…
Turning points: Gazprom M&T's Rob Pringle
European energy firms are pooling IT skills in a forum aimed at tackling regulatory challenges. Gazprom Marketing & Trading’s Rob Pringle, a founding member, speaks to Gillian Carr
Cutting edge: Jamshidian decomposition for pricing European energy commodity swaptions
In this article, Hamid Arian and Ion Rada propose a practical method for calculating the exact price of energy commodity European swaptions under the standard Markov diffusion model for energy commodity futures term structure. Their argument faithfully…
Academic battle rages over oil speculation, high prices and volatility
In spite of attempts to impose commodity position limits in Europe and the US, a fierce battle continues to rage over whether speculation in oil is responsible for high prices and volatility. David Wigan reviews some of the arguments
Japan faces soaring cost of ditching nuclear power
After the Fukushima nuclear disaster, Japan announced ambitions to phase out the use of nuclear generation. But faced with bulging energy imports and high prices, official enthusiasm for the plan has waned. By David Hayes
LNG derivatives suffer from lack of liquidity
The growth of LNG fuelled high hopes for the LNG derivatives market, causing exchanges to launch a variety of contracts during 2012. But firms say there’s a long way to go before a liquid market emerges. Jay Maroo investigates
European energy firms struggle with unclear Remit rules
Remit is ushering in an array of new reporting requirements designed to curb abuse in European energy markets. But firms are struggling to make sense of the requirements. Gillian Carr reports
Ferc cracks down on power market manipulation
The US Federal Energy Regulatory Commission has declared war on power market abuse, targeting allegations of manipulation by firms including Barclays, Constellation Energy and Deutsche Bank. Further investigations are expected to follow as the agency…
Nucor praised for pursuing natural hedge
US steel maker’s acquisition of natural gas assets is seen as viable long-term hedge and an alternative to derivatives
Energy Risk Europe: Firms weigh up data management systems for regulation
Sapient Global Markets, Vitol and Gazprom Marketing & Trading discuss how firms can prepare data management systems for regulatory requirements
Energy Risk Europe: Austrian Airlines risk manager rails against hedging
Austrian Airlines risk manager argues fuel hedging delays firms' adaptation to higher costs and should be avoided
JP Morgan deserved “a very severe penalty”, says Ferc chairman
Tougher enforcement stance is justified and paying dividends, claims Ferc chairman
Firms shy away from public utilities despite CFTC relief
No-action letter not enough to convince counterparties to trade with public utilities
CFTC clarification on physical gas deals welcomed
CFTC answers concerns over treatment of physical gas storage and transportation agreements under Dodd-Frank
Threat of downgrade hangs over North American power firms
Low natural gas prices, weak power demand and rising costs put pressure on credit ratings
Energy Risk Asia awards dinner
Energy Risk honoured success at the annual Asia awards dinner held in Singapore on September 26 following our Asia conference. We showcase the winners