Mercatus Energy

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Oil Hedging Losses Coming Soon To A Board Room Near You

In recent weeks the Brent-WTI spread has collapsed once again, settling yesterday at just above $17/BBL after trading as high as $25.53 in mid November. As the following chart shows, the spread has varied quite drastically over the past couple...

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Basis Risk Leads to Unexpected Fuel Hedging Results

While we analyze numerous basis relationships across the energy commodity markets on a regular basis, it's rarely a simply task, as the relationships...

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Is Brent Now the Global Benchmark for Crude Oil Hedging?

In early December the EIA announced that beginning with its 2013 Annual Energy Outlook, which will be published in the spring, the agency is going to...

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What Do You Need To Know About Energy Hedging & Risk Management?

As our blog approaches its third anniversary, we want to know what aspects of energy hedging and risk management you want us to cover, and from what...

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natural gas hedging - crude oil hedging

Sell Crude Oil - Buy Natural Gas - Hedge or Widowmaker?

In June of 2011, in a post titled Energy Hedging Myths Demystified - Part I, we took addressed the age old theory that crude oil and natural gas...

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Large Energy Consumers Now Hedging Via E&P Deals

In recent weeks two large natural gas consumers, Nucor and LSB Industries, have announced that they are purchasing natural gas "working interests" to...

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A New Look At Sovereign Oil Hedging Strategies

Last December, in a post titled Sovereign State Oil Hedging On The Rise, we highlighted the hedging initiatives of several sovereign oil and gas...

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A Look At Volatility As It Relates To Crude Oil Hedging

In the most recent version of This Week in Petroleum, the EIA published an article on historical vs. implied volatility in Brent crude oil which...

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Beware of Energy Derivative Marketers Promising Cash

In recent weeks we've been asked by several clients to review potential transactions which have been proposed to them by their counterparties. The...

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Fuel Hedging: Swaps + Put Options = Call Options

As all large fuel consuming companies are well aware, fuel prices have increased significantly over the past couple months. Relative to their June...

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