Taking Control
By Mike Corley
June 2013
"While many airlines benefit from hedging, the majority are not realizing the full benefits of hedging because they are not actively managing their hedge portfolio."
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Fuel Costs: Hedge Your Bets
By Mike Corley
May 2013
"Given intensive competition in the airline industry, a proper fuel hedigng program can create a significant competitive advantage."
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Minimising Risk Through Bunker Hedging
By Mike Corley
April 2013
"As the global oil markets evolve, the qustion of wherther or not to hedge continues to challenge companies thoughout the shipping industry."
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The Key Elements of a Successful Oil & Gas Hedging Program
By Mike Corley
March 2013
"The key to a successful oil and gas hedging program is developing a solid plan and sticking with it."
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Hedging Options Lag Production Growth
By Gregory DL Morris
January 2013
"Counterparties are active in natural gas and crude oil, and even refined products, because the underlying physical markets are well connected. They are less willing to participate in NGL trading or hedging because that infrastructure does not yet exist."
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The Art of Creating a Corporate Energy Hedging Programme
By Jay Maroo
December 2012
"However, Mike Corley at Mercatus Energy Advisors believes the adoption of this strategy can be recipe for trouble. It might not require cash upfront but it’s rarely the best strategy. If you actually quantify it, more times than not, a swap or simple call option has produced better results than a costless collar when you consider the all-in cost.”
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Nucor Praised for Pursuing Natural Hedge
By Alexander Osipovich
December 2012
"In other words, Nucor may simply be exchanging one set of risks for another," says Mike Corley, president of Mercatus Energy Advisors, a Houston-based consultancy that advises companies on energy hedging. "Time will tell whether these are good decisions," he adds. "It is certainly a different approach than many have taken in the past."
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Jet Fuel Hedging Remains A Tough Call for Airlines
By Peter Shaw-Smith
November 2012
"Airlines often do not place enough emphasis on fuel-price risk management, said Michael Corley," president of Mercatus Energy Advisors of Houston, Texas.
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Natural Gas Producers Step Up Hedging
By Alexander Osipovich
November 2012
"Producers have been drawn back into the market by attractive forward prices, but they are not hedging as much as they were in 2009 or 2012, according to Mike Corley, president of Houston-based consultancy Mercatus Energy Advisors."
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Experts Question Shift in Mexico Oil Hedging Strategy
By Alexander Osipovich
September 2012
"The problem is, if prices drop significantly and stay low for an extended period of time, then obviously they won't be in good shape," says Mike Corley, president of Houston-based Mercatus Energy Advisors. "Clearly they're trying to reduce the amount of premium to as little as possible..."
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Benchmark Shift Drives ICE Brent Option Surge
By John Parry
September 2012
"Mercatus, an energy hedging and risk management advisory firm, recently surveyed the airline industry on its jet fuel hedging activity. The company found that more than 80% of the airlines were hedging fuel price risk, and that the most common instruments to do this were swaps and options."
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Commodity Hedging's PR Dilemma
By Alexander Osipovich
September 2012
"If your hedging programme is well-structured and if the fundamental reason behind the hedge was a sound one, explaining a loss is straightforward, says Corley. "
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ICE's Swaps Switch Moved Up to October from January
By John McCrank
September 2012
"But there is still a lot of uncertainty among swaps market participants as to how exactly they will be affected, said Mike Corley, president of Mercatus Energy Advisors, a Houston-based consultancy that advises companies on fuel hedging".
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Qantas Nosedives to Loss in Turbulent Airline Industry
By Shane Croucher
August 2012
"In the report titled The State of Airline Fuel Hedging & Risk Management, written by Mercatus Energy Advisors and Airline Economics, 43 percent of participants surveyed revealed they are content having a significant exposure to spot market prices and therefore potential price swings."
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EasyJet Shares Soar as Increased Traffic, Fuel Hedging, Lift Bottom Line
By Lianna Brinded
July 2012
"According to a research report from Mercatus Energy Advisors and Airline Economics titled The State of Airline Fuel Hedging & Risk Management, which is comprised of data from 24 different airlines.."
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Should Airlines Hedge Their Bets on Fuel?"
By Martin Rivers
July 2012
"There was a fear that oil prices were going to go to $200 or $300 a barrel," says Mike Corley, president of hedging consultancy Mercatus Energy Advisors. "The fear of being exposed to $200 a barrel was so great that a lot of people convinced themselves prices could not decline.
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Back to the Futures: ICE swap Switch Offers Boon to Big Traders
By Chris Baltimore and David Sheppard
July 2012
"You can't just flip the switch overnight and say 'Okay, now all these things are now futures,'" said Mike Corley, president of Mercatus Energy Advisors, a Houston-based consultancy that advises companies on fuel hedging.
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Gambling with a clear game plan
By Martin Rivers
July 2012
"But mitigating fuel volatility is about more than locking in contracts for fear of even higher prices around the corner. As Mike Corley, president of hedging consultancy Mercatus Energy Advisors, explains, effective strategies should deliver predictable returns in all hypothetical market conditions".
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Fluid Hedging
By Mike Corley
July 2012
"Many airlines, who were convinced that oil prices were going to continue to increase, are now facing losses as a result of entering into fixed price swaps at levels well above current market prices..."
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OPIS LP Alert
By Mike Angell
June 2012
"The NYMEX WTI contract is the more common proxy hedge in the NGL industry, says Michael Corley, president of risk consulting firm Mercatus Energy Advisors. But producers are facing increasing basis risk as NGL production surges in different parts of the country..."
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IATA Warns Airlines of Worsening Eurozone Crisis and Oil Price Rise Risks
By Lianna Brinded
June 2012
"A majority of airlines have only implemented a hedging programme for 21 percent and 40 percent of its fuel for 2012, in a bid to mitigate losses from rising oil prices."
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IAG Losses Soar to €249 Million as Spain Recession and High Oil Prices Hurt
By Shane Croucher
June 2012
"A report from Mercatus Energy Advisors and Airline Economics showed that most of the world's airlines were leaving over half of their fuel costs exposed to future oil price rises without protecting themselves with hedging tools.."
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Airlines Hedge Less than Half of Fuel Costs Against Price Rises
By Lianna Brinded
May 2012
"Interestingly, the Mercatus Energy Advisors report revealed that participants that are currently and / or have utilised various hedging instruments and structures to their fuel purchase programme, favour fixed-price swaps and call options..."
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Analysts still sceptical of Delta Airlines Refinery Acquisition
By Alexander Osipovich
May 2012
"Its slightly more intriguing and understandable than it was a week ago, but their swapping one risk for another", says Corley.
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Airline hedging falling short of best practices
By Alexander Osipovich
May 2012
"I’ve talked to airlines who admit that they often make their hedging decisions based on emotional views about oil prices,” says Mike Corley, president of Mercatus Energy Advisors, which conducted the study over the winter of 2011–12 and released its anonymised results in April."
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Once Linked, Oil and Gas Break Up
By Carolyn Cui
March 2012
"We are not seeing as much a reduction as anticipated," said Mike Corley, president of Mercatus Energy Advisors LLC, a Houston-based energy advisory firm. "This is the first time that natural-gas prices have stayed depressed for such a long period of time."
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IP Week Retrospective
By Petroleum Review
April 2012
"Mike Corley explained that for E&P companies, effective hedging can lock-in future cash flows or acquisition economics as well as increasing their borrowing case and reducing the impact of price volatility on the bottom line."
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Could Fuel Prices Reach $8 Per Gallon?
By Tony Corpin
April 2012
"According to Mercatus Energy Advisors, large fuel consuming companies enter into hedging contracts to mitigate their exposure to future fuel prices that might be higher than current prices and/or to establish a known fuel cost for budgeting purposes."
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Possible Delta Airlines Refinery Acquisition Raises Eyebrows
By Alexander Osipovich
April 2012
"Still, industry observers are sceptical about the potential value of the deal. "It's a potential disaster," says Mike Corley, president of Mercatus Energy Advisors, a Houston-based consultancy that advises companies on fuel hedging".
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Low US Natural Gas Prices Stir Hedging Talk
By Alexander Osipovich
March 2012
"While many end-users view options as an unnecessary expense, they can be quite attractive when prices are trading at such low levels," Michael Corley, president of Mercatus Energy Advisors, wrote in his blog last week."
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Fuel Efficiency
By Mike Corley
March 2012
"As everyone in the industry is well aware, high and volatile fuel prices can and do wreak havoc on airline profit margins. However, there are numerous hedging strategies that allow airlines to mitigate this risk".
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An Oil Spike
By Ed Butler
February 2012
Listen to Mike Corley, President of Mercatus Energy Advisors, speak with BBC's Ed Butler about oil hedging and risk management in the current environment.
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On The Spot
By Ross Stewart Campbell
February 2012
"In 2012, we anticipate that the issues that most concern our clients will be regulatory uncertainty, the economic environment and, in North America, low natural gas prices. Regarding regulatory uncertainty, the list is obviously long but, as it relates to hedging and trading..."
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US Natural Gas Hedging: 2012 Outlook
By Pauline McCallion
January 2012
"Over the course of 2012 and beyond, a number of potential events could turn the current price lull on its head, however. Obviously, the economic outlook will play a major role, says Michael Corley, president of Mercatus Energy Advisors".
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Companies Cautious on Hedging in Headline-Driven Energy Markets
By Gillian Carr
January 2012
"In addition to economic risk and weather risk, regulatory risk is still on the minds of many, especially in the OTC markets, says Mike Corley, president of Mercatus Energy Advisors in Houston. "There's definitely been an overall decline in trading volumes".
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How to Manage Your Hedges
By Mike Corley
January 2012
"It goes without saying that commercial airlines are constantly faced with managing their exposure to volatile fuel prices. A variety of instruments-futures,swaps,options and other derivatives.."
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Companies freeze commodity hedging as Europe teeters
By Jonathan Leff
November 2011
"How do you make a hedging decision today for a year or 18 months forward when you have no idea what the demand from your own customers is going to be for the next quarter?" asks Mike Corley, president of Mercatus Energy Advisors, which works with dozens of corporations on their hedging strategies".
Analyzing Counterparty Credit Risk
By Allegro
November 2011
"...in a recent posting, Michael Corley of Mercatus Energy Advisors, Houston, notes, We’ve received numerous inquiries from oil and gas producers that are being forced to find new hedging counterparties…most often due to credit-related issues.”
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ICE's Gasoil Contract
By Tom Doggett
November 2011
"Still another factor is the change in the U.S. regulatory environment. According to Michael Corley, president of Mercatus Energy Advisors, a Houston-based energy trading and risk management firm, companies that want to hedge or speculate on petroleum prices are worried about position limits and other regulations that will be implemented by the Commodity Futures Trading Commission..."
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The Big Fuel Gamble
By Victoria Tozer-Pennington
November 2011
"Mike Corley of Mercatus Energy Advisors says: Southwest definitely has the best results from hedging, although its chief executive has recently quoted that the airline is not nearly as well hedged as it used to be and it will slowly lose that competitive advantage".
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Hedging Survey
By Anastasia Gnezditskaia
July 2011
"Smaller- to mid-sized E&P companies that did not hedge at all in the past have become “more aggressive” with their hedging strategies and have significantly increased their hedging volumes, Mike Corley, president of Mercatus Energy Advisors, said".
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To Hedge or Not to Hedge
By Larry Hickey
June 2011
"Mike Corley, a long-time energy and risk management consultant and president of Houston- based Mercatus Energy Advisors, recounts the story a family-owned, Oklahoma-based oil and gas producer that hedged conservatively".
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To Hedge or Not to Hedge: Oil & Gas Hedging for CFOs
By Mike Corley
May 2011
"Historically, many have argued that E&Ps serve as vehicles for obtaining exposure to energy commodity prices. However, in recent years, industry best practices have evolved and the new consensus is that E&Ps must take their own proactive steps to mitigate risk, including commodity price risk".
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Energy players expect further market fragmentation
By Pauline McCallion
January 2011
"The benefits of working for a big company or a bank do not exist anymore [due to Dodd-Frank regulation]. So we could see more commodity traders leave big energy companies, banks and large hedge funds."
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The Bright Shining Lie Between Hedging and Speculation
By Larry Hickey
January 2011
"As long time energy and risk management consultant and president of Houston-based Mercatus Energy Advisors, Mike Corley can tell you, Many Hedges look like thinly veiled directional bets".
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Hedging Mitigates Price Risk Exposure
By Mike Corley
October 2010
"Hedging has become a fundamental strategic decision for many oil and gas companies, and is the only sound way a producer can significantly reduce its financial exposure to volatile oil and gas prices"
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