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The Mercatus Energy Pipeline

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Meet Mercatus Energy Advisors in London, Dubai, Calgary or Hong Kong


Over the course of the next few weeks our team will be crossing the globe to meet with clients and participate in several industry conferences. More specifically, we'll be in London, Dubai, Calgary and Hong Kong.

October 2015 Oil & Gas Hedging Update

The only constant in the global energy markets in recent months has been volatility. While forward prices increased modestly during August, despite many significant day-to-day, declines, prices reversed course during September.

Since our last update the one-year forward curves for the four primary crude oil markets have declined by an average of 6.69%. Month-over-month, one-year forward prices for WTI, LLS, Brent and Dubai crude oil have declined by 4.63%, 7,41%, 5.30% and 9.43%, respectively. On a year-over-year basis, the one year forward curves for WTI, Brent, LLS and Dubai are lower by 45.57%, 46.35%, 44.72% and 48.25%, respectively.

London & Houston ETRM Seminars - Registration Ends October 5th


If you haven't already registered for one of our upcoming seminars and you're looking to expand your energy trading and risk management knowledge, join us in Houston (Oct 14-15), London (Oct 13-14) or Singapore (Nov 18-19).

September 2015 Oil & Gas Hedging Update


The energy markets have offered all market participants a pretty wild ride since our August update. While forward crude oil prices are currently trading lower by about $2/BBL relative to yesterday’s settlements, the past few days has been one of the most volatile in periods in decades. After a selloff in nearly all asset classes across the globe pushed crude oil prices to six year lows last week, the spike over the past few days is the largest in such a short period of time since the Iraq invasion of Kuwait in 1990.

Oil & Gas Producer Hedging & Financing - A Legal Perspective


This is a guest post by Jeff Nichols, partner at Haynes and Boone, LLP in Houston. Jeff  represents a variety of clients in the energy and finance industries with secured and unsecured credit facilities, project finance and other structured energy transactions.

Hedging is usually thought of in terms of cash-settled derivatives offered by lenders as part of a broader financial relationship tied together by a credit agreement and perhaps collateral documents. But many other transactions blend hedging and finance attributes. Focus on these different transactions becomes acute during times of financial stress, which drives concerns about enforcing remedies.

Top Energy Hedging Failures in the Current Market Environment


As energy hedging advisors, we often see many market participants, make significant, if not catastrophic, errors related to their hedging strategies. While the overall hedging and risk management knowledge and expertise of most market participants continues to increase, many continue to make the same mistakes as their decisions are based on their opinion about the markets rather than data and sound analysis.  In no specific order, these are the most common, avoidable hedging mistakes we have witnessed companies making in recent months.

Upcoming Singapore, London & Houston Seminars


If the recent decline in prices has you wondering how best to hedge or trade in such an environment, then one of our upcoming seminars is likely to be of interest. Whether you're new to the industry or a veteran, you'll not only learn the tools and tricks of the trade but also have the opportunity to network with other industry professionals.

A Practical Guide To Developing A Corporate Fuel Hedging Policy


As more and more companies are looking at hedging their exposure to volatile fuel prices, many for the first time, we thought it would be prudent to revisit our recommendations regarding the development, or updating, of a corporate fuel hedging policy. So, how does one go about developing a fuel hedging policy (also often called a fuel price risk management policy)?

An Introduction to NGL Hedging Part III - Collars


This article is the third in a series covering the most common hedging strategies utilized by market participants in the NGL (propane, butane, ethane and natural gasoline) industry. The first article in the series, An Introduction to NGL Hedging Part I - Swaps, explained how an E&P company can utilize fixed price propane swaps to hedge their exposure to propane prices. The second post in the series, An Introduction to NGL Hedging Part II - Options, addressed how an industrial propane consumer can hedge their propane price risk with a strategy known as a call option.

A Beginners Guide to Fuel Hedging - Call Options


This post is the third in a series where are addressing the most commonly utilized fuel hedging strategies. The previous posts in the series explained fuel hedging with futures (Part I: A Beginners Guide to Fuel Hedging - Futures and fuel hedging with swaps (Part II: A Beginners Guide to Fuel Hedging - Swaps.

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