How to Reduce Basis Risk by Hedging with Options - Part I
As readers of our blog are well aware, we spend a lot of time analyzing and discussing basis relationships and the accompanying risk. While it's...
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Bunker Fuel Hedging & Price Risk Management - Call Option Spreads
This post is the fourth in a series on hedging bunker fuel price risk. The first post in the series, An Introduction to Bunker Fuel Hedging,...
Optimizing "In-The-Money" Fuel Hedging Strategies
Given the recent increase in global fuel prices we thought it would be beneficial to explore how companies can optimize their existing fuel hedging...
The Case For Employing A Dynamic Fuel Hedging Program
Historically, many large fuel consuming companies have utilized passive fuel hedging strategies but, companies who "hedge and forget it" often accept...
The Ultimate Airline Fuel Hedge Part II: Don't Buy A Refinery?
Last April, in a post titled The Ultimate Airline Fuel Hedge: Buy A Refinery, we highlighted Delta Airlines acquisition of the Trainer refinery from...
Is There Such A Thing As A Cheap, Low Risk Fuel Hedging Strategy?
Over the course of the past three months, the prompt month Brent, WTI, gasoil and heating oil futures have averaged daily changes of $1.02/BBL,...
Mercatus Energy Advisors Most Popular Posts of The Year
2012 was a wild year in the energy markets. To celebrate the new year (yes, we're well aware that we're a few weeks behind), we decided to look back...
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...
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...
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...