risk management

Brent curve collapse in animation | 02 Feb, 2015

The Brent crude forward curve had a wild ride across 2008 and 2009.  The commodity supercycle peak dragged spot crude towards 150 $/bbl, with forward ...

Spot vs forward price dynamics: UK gas case study | 17 Nov, 2014

Commodity markets are plagued by confusion as to the relationship between spot and forward prices.  There are good reasons.  The relationship is not ...

Risk management of optionality in energy portfolios | 05 May, 2014

This is the third in a series of articles on the principles of energy risk management, written by Nick Perry. Energy portfolios are rich with physi ...

Unique energy risk management characteristics | 07 Apr, 2014

This is the second in a series of articles on the principles of energy risk management, written by Nick Perry. In the previous article we considere ...

There is more to energy risk management than option theory | 17 Mar, 2014

This is the first in a series of articles on the principles of energy risk management, written by Nick Perry. The business of energy companies incr ...

GasTerra storage auctions & flexibility value implications | 10 Feb, 2014

Twice a year GasTerra auctions Dutch storage capacity.  The price the market is willing to pay for this capacity provides a useful insight into the v ...

What drives contract counterparties back to the negotiating table? | 23 Sep, 2013

This is the first in a series of articles on commercial considerations in the negotiation of long term energy contracts, written by Nick Perry. Th ...

Beware of proxy risk | 17 Jun, 2013

Supply contract pricing terms are a key driver of marginal gas pricing dynamics in spot and forward markets. Contract prices can vary widely and terms ...

Headaches from FX and interest rate exposures | 15 Apr, 2013

Since the heightened panic across the Eurozone last summer, central banks have flooded credit markets with cheap money.  This has temporarily calmed ...

Currency wars and European energy portfolios | 11 Feb, 2013

Foreign exchange market volatility has sprung to life over the Christmas break.  Over the last two months the EUR has appreciated 7% against USD and ...

Cracking gas storage and swing valuation | 21 Jan, 2013

As the European gas market matures, so does the depth and sophistication of flexibility services available. Swing and storage products form the founda ...

US LNG export contracts: a European buyer’s perspective | 26 Nov, 2012

The US has 12 regasification terminals (a combined 196 bcma of import capacity) that currently stand largely idle.  These terminals are testament to ...

The death of gas volatility in Europe? | 03 Sep, 2012

A benign volatility environment The level of realised spot price volatility at European gas hubs has fallen to historical lows over the last three ye ...

The evolution of risk capital allocation in energy companies | 11 Jun, 2012

The following article was published in the May 2012 edition of Energy Risk magazine. The fallout from the financial crisis has seen a fundamental shi ...

The credit risk implications of a eurozone breakup | 21 May, 2012

We started this year with two articles on the potential for a eurozone breakup in 2012.  The first article focused on why we thought a breakup was a ...

Structured energy contracts and VaR | 23 Apr, 2012

It is common practice for energy companies to measure and control the risk around energy contracts using a Value at Risk (VaR) metric.  This is relat ...

NBP gas volatility surface evolution | 16 Apr, 2012

For many years the UK gas options market was dominated by Over-The-Counter (OTC) trading, until ICE listed options on the underlying NBP futures contr ...

Mark to market tensions | 02 Apr, 2012

It is now a decade since the collapse of Enron and the rapid demise of its US marketing and trading company peers.  One of the key developments from ...

Energy risk management: the demise of Value at Risk? | 19 Mar, 2012

‘Value at Risk is like an airbag that works all the time, except when you have a car accident’. – David Einhorn, hedge fund manager. There has ...

Portfolio value: the whole does not equal the sum of the parts | 30 Jan, 2012

Portfolio value is often highlighted and recognised as a key consideration in asset investment/divestment decisions or contract commitment business ca ...

Preparing your business for a eurozone breakup? | 09 Jan, 2012

The probability and timing of a disorderly eurozone breakup are difficult to predict.  But if a breakup occurs, the risk impact on most European ener ...

Will the eurozone survive 2012? | 03 Jan, 2012

Europe faces an existential crisis in 2012.  Credit market stress in response to ballooning sovereign debt levels has forced governments to announce ...

Timera Energy’s 2011 review | 12 Dec, 2011

A year in review The season of long lunches, last minute shopping and visits from the in-laws is upon us again.  As a result this will be our last p ...

Effective use of market benchmarks for the value of flexibility | 28 Nov, 2011

As we presented in a recent article, there are a surprising number of publicly available benchmarks for the value of flexibility in European power and ...

Transportation capacity valuation and hedging | 24 Oct, 2011

We explored in a recent article the crucial role transportation capacity and interconnectors play in European gas and power markets.  The ability to ...