RISK

THE SCIENCE OF SURVIVAL

Risk Management Tools

The world becomes more and more risky, and the energy sector is no exception. The landscape is changing as disruptive new technologies evolve. Uncertainty brings both challenge and opportunity. Resource Economist provides training courses on risk management as well as events geared towards discussion of investment risks during the energy transition.

Resource Economist provides courses in hedging price risk in the gas and LNG markets. More than two-thirds of the LNG traded around the world is priced off crude oil and refined petroleum products, and an increasing variety of swaps and futures contracts are on offer to allow more precise gas-on-gas risk management. 

Oil is arguably the world’s most sophisticated commodity market, with futures contracts in crude oil and refined petroleum products, and a bewildering array of swaps and CFDs allowing market participants to fine-tune their hedging activities. Our courses provide a structured introduction to the pricing mechanisms most frequently used in pricing oil and oil products, including assessments by Price Reporting Agencies and derivatives markets, and the links between the two.

Electricity pricing is highly complex and time-dependent. As well as being tied to the fuels that are used to generate electricity, wholesale electricity is also traded on a number of regional and local exchanges, for both immediate delivery and for delivery many months in the future. Our courses sim to de-mystify the jargon, and explain the links between electricity supply and the instruments that are used in trading power.

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Managing risk is crucial. We publish forecasts and scenarios for oil, gas and power prices but there are no crystal balls for the energy sector. Markets are volatile, and managing risk is essential. No matter how good the forecast, there is always risk.

Peter Stewart

Chief Energy Analyst, Interfax