The CTRM Conference will have a strong regulatory focus in the early afternoon and one of the presentations will look at the Impact of... continue reading
Next Generation Integrated Treasury and Trading for Energy and Commodity Companies
Commodity markets have always been uncertain and have often exhibited extended periods of volatility. Events such as the collapse of Enron and other marketers, the financial crisis, and more recently, BREXIT, have all had massive impact, and yet, after each event, measures have been put in place, both regulatory and in terms of controls, to protect markets, margins and profits. Each tumultuous event has brought learning, innovation and improvements in business processes. The energy industry has also learned from these experiences; adopting better and improved risk controls, systems and tools to predict, protect and profit. Yet, now may be the time to innovate once again to better protect margins amid increasing costs and lower commodity prices.
Energy producers, traders and consumers today face a challenging trading environment with more regulatory oversight, lower prices, increasing costs and almost constant volatility. As a result forward thinking energy companies are already adopting a more closely integrated treasury and trading approach, a potentially overlooked opportunity by many. Typically, trading and treasury are separate areas of business with limited or no integration between them. The traders work to sell commodities at the best price or to profit from trading, while the treasury function with its concern over available cash, navigating future investments and doing so in the right currency and at the right location, has a range of responsibilities, including FX and IR hedging, broader credit management, debt and capital management and more. Usually, the treasury department gets a fixed time view of trading positions to work with and can miss opportunities to protect profits or control costs as a result as these exposures change rapidly. Even large oil and gas majors have experienced the situation where trading has a good month but FX rates moved against them to give an entirely different result. Despite believing that they were hedged, FX markets went against the company leaving it with significantly eroded traded profits.
To read more please download Next Generation Integrated Treasury and Trading for Energy and Commodity Companies
New Age Energy Markets - Challenges for Utilities, IPPs and Traders
The North American power and gas markets are undergoing an accelerating evolution driven by increasing regulation, new and emergent technologies, and a persistent surplus of natural gas brought about by the “shale revolution.” The transformation from a coal-centric power market to one reliant upon renewables and natural gas for baseload power generation has had profound operational and commercial implications for both the electricity and natural gas markets.
Much of the change that has emerged has been catalyzed by regulation at the federal, regional and state levels, including emissions/greenhouse gas regulation and renewable portfolio standards. These regulatory mandates have been largely answered by technology – cheaper and more efficient solar and wind generation, abundant sources of natural gas from long-reach lateral drilling and massive hydraulic fracturing, smart grid technologies that improve grid efficiency and reliability, and more efficient industrial and consumer appliances that reduce system load. In aggregate, these changes have had massive and ongoing impacts across the energy industry in the US, increasing complexity of operations and affecting the business models of many of its participants.
For power utilities, IPP’s and traders, this New Age Energy Market presents a number of challenges that must be addressed to operate profitably.
To read more please download New Age Energy Markets - Challenges for Utilities, IPPs and Traders
Responding To Continual Energy Market Change
The European power and gas industry is currently going through a period of very rapid change that has potentially far reaching consequences. While change is certainly no stranger to the industry, it requires players in the industry to constantly re-evaluate their business process and technology infrastructures in order to adapt and thrive. Examples of the drivers for change include:
- Changes in the regional and national political landscape in terms of both environmental issues and the overall structure of the industry,
- A host of new regulatory and governance regulations,
- Decreased profit margins and,
- Major shifts in all aspects of technology from generation to computing,
Energy companies will need to rapidly respond to these changes and this response will certainly include a review and perhaps upgrade of their Energy Trading and Risk Management (ETRM) and related software.
To read more please download Responding To Continual Energy Market Change
Deriving Business Value from Big Data using Sentiment analysis
‘Big Data’ are two small words that are widely used to describe the massive growth in data of all forms and that hold; the promise of delivering huge potential business impact. The question is, how?
Today, and increasingly in the future, businesses are surrounded by masses of data and raw information. Some of this data is very relevant but much of it is not. Further, most of that data is unstructured in the form of email, documents, images and different types of social media, blogs, and so on. Unstructured data is notoriously difficult to access and query, it is scattered across many different locations and formats, and it requires some form of preprocessing before it can be analyzed and used. Yet, it is this unstructured type data that is primarily exploding in quantity, representing around 80 per cent of the annual growth of data and doubling in quantity every two years.
A few years ago, ‘Big Data’ was just another buzzword; a fad perhaps that would eventually fade. Today though, big data is increasingly being used to provide deep insight and predictive analysis in to everything from stock market movements to individual buying behaviors. Those that are able to make use and harness the power of this disruptive force in markets will benefit by being smarter, faster and more efficient, meaning they are more likely to seize opportunities early and thereby profit. In the financial services industry, this possibility has not been lost on the banks who along with associated firms, are investing heavily in applying a variety of technologies and approaches to unlocking the value of ‘big data’.
To read more please download Deriving Business Value from Big Data using Sentiment analysis