Energy Risk Management

by Fusaro, Peter C.

• ISBN13: 9780786311842
• ISBN10: 0786311843
• Format: Hardcover
• Copyright: 1998-04-01
• Publisher: McGraw-Hill

Summary

Energy deregulation, privatization and competition are a hot international topic. Professionals in this field understand the importance of hedging their financial risk, but are often unclear how to do so. The result is that either they take undue and unwarranted risk or they shy away from futures and derivatives investments that could improve their financial position while preventing substantial losses. Energy Risk Management is the first book to address the important issues of worldwide energy price risk management. Peter C. Fusaro has assembled the leading industry figures to explain general theories and practices for hedging risk, and specific methods to effectively manage risk in markets such as coal, natural gas, electricity, hydropower and others. Topics include: The ABCs of energy financial instruments - How to use hedging tools like futures and options, forwards and spreads; Energy securitization - Ways to securitize oil and gas production, and project finance implications; The future of energy price risk management - Globalization of energy markets, and an integrated approach to managing all risks. Energy professionals and investors worldwide require information to clarify risk management concepts and applications that are new to them. Energy Risk Management steps into that void, providing proven hedging strategies in non-technical language that simplifies this intimidating topic.

Author Biography

Peter C. Fusaro is Senior Vice President, Energy Consulting, for ABB Financial Services. Over the past 20 years he has worked for such energy organizations as Petroleos de Venezuela and the U.S. Department of Energy. Fusaro has also written numerous articles for energy trade journals, and he recently completed a comprehensive study that covered the application of risk management for electric power markets.

Table of Contents

CONTRIBUTORS	IX	(2)
PREFACE	XI	(2)
INTRODUCTION	XIII
Chapter 1 Why Use These Financial Tools?	1	(8)
Peter C. Fusaro
Chapter 2 The ABCs of Energy Financial Instruments	9	(28)
Peter C. Fusaro
Chapter 3 European Energy Markets Developments	37	(16)
Seana Lanigan
Chapter 4 Asian Market Developments	53	(18)
Paul Horsnell
Chapter 5 Risk Management in North American Natural Gas	71	(18)
Patricia Hemsworth
Chapter 6 The Evolution of US Electricity Markets	89	(18)
Dr. Antoine Eustache
Chapter 7 European Electricity Trading Markets	107	(12)
Jeremy Wilcox
Chapter 8 The Development of Coal Futures	119	(14)
Jay L. Gottlieb
Chapter 9 Options Theory and Its Application to Energy	133	(24)
Dr. Nedia Miller
Chapter 10 Value at Risk for Power Markets	157	(22)
Kenneth Leong
Riaz Siddiqi
Chapter 11 Technical Analysis in Energy Trading	179	(16)
Henry Lichtenstein
Chapter 12 Credit Issues and Counterparty Risk	195	(22)
Robert Maxant
George Travers
Chapter 13 Future of Energy Price Risk Management	217	(22)
Peter C. Fusaro
Glossary	239	(6)
Peter C. Fusaro
Index	245