Active Trading and Risk Management

Energy is a traded commodity and since 2003, after many years of falling prices, the price of both power and gas has increased significantly and in a volatile manner.

It is difficult to predict future wholesale energy prices with any degree of certainty, as there are many factors that influence prices, both in the short and long term including:-

• Oil prices
• Exchange rates
• World events
• Carbon emissions trading
• Supply & demand
• Weather

Energy can be traded NOW for future periods up to 5 years out, providing potential opportunities to lock in prices. Energy can also be traded in the short term or prompt market for delivery tomorrow, next week or within the current month. Prompt prices are often lower than future prices, but are susceptible to huge swings, linked to movements in some of the factors detailed above.

Energy suppliers offer a range of flexible contracts with fixed and variable pricing. Advanced products are also available including caps, collars and many more sophisticated options either as an inherent element of the physical supply agreement or on a standalone basis.

The opportunities for large consumers to manage their risk exposure to energy prices are almost infinite, but how do you know when to trade and which risk management tools are most suited to your business?

For major energy consumers, Inenco offer a tailored solution that addresses:-

• Supplier selection
• Contract structure
• Trading strategy
• Hedging and risk management tools

We can also provide support on an ongoing basis to enable clients to adopt an active trading and risk management strategy.

The first step is to assess your risk exposure and corporate risk management objectives. So, whether you want to:

• Protect a budgeted position
• Increase future cost predictability
• Maximise profits

Call us NOW so we can discuss your specific requirements.