Earlier this week, the UK government submitted draft legislation on its Electricity Market Reform (EMR). In a series of blog posts from last July, I critiqued the central premise underlying this insurance proposal. The touted benefits overlook the cost of risk passed along to UK taxpayers or ratepayers. They are based on a fanciful imagination [...]
Delta Airlines’ deal to buy the Trainer Refinery owned by Phillips66 was formally announced yesterday. The 8K filing is available here and includes the press release and slide show. Until yesterday the deal was being talked about as a way to hedge the fluctuating price of jet fuel oil. But the announcement makes clear that [...]
You like potato and I like potahto, You like tomato and I like tomahto, Potato, potahto, tomato, tomahto! Let’s call the whole thing off! from Let’s Call the Whole Thing Off by George & Ira Gershwin This past Tuesday was the closing date for Comment Letters to the CFTC on its proposed Volcker Rule, [...]
Over the last few years, natural gas prices in the U.S. have been pounded by a variety of factors. Front and center are the continuing breakthroughs in horizontal drilling and hydraulic fracturing. On top of this, the winter of 2011-2012 was the fourth warmest on record, according to the National Oceanic Atmospheric Administration (NOAA), and [...]
Lots of commentary on the web about the news that Delta Airlines is thinking about buying ConocoPhillips’ Trainer Refinery as a way to hedge the cost of jet fuel. Liam Denning at the WSJ’s Heard on the Street column offers a concise statement of the critical view.
In a previous post, I criticized a report by the consulting firm IHS on the potential impact of the Volcker Rule on the US energy industry. Kurt Barrow, Vice President of IHS Purvin & Gertz and co-author of that report, has sent me the following reply: Thank you for your interest in our report. We wanted [...]
Natural gas producers in the US are faced with tough choices. Advances in drilling technology have made low cost production from shale resources viable on a large scale, and the industry has been in a race to lay claim to the most valuable properties and to capture a competitive advantage in mastering the technology. But [...]
Earlier today, the consulting firm IHS released a report decrying the horrible consequences that the Volcker Rule would have for the US energy industry and the economy. It’s a hatchet job. Why?
In a previous blog post, I criticized a study by the economics consulting firm NERA purporting to measure the costs companies would face as the Dodd-Frank reform of the OTC derivative markets is implemented. NERA is working on behalf of a group of energy companies lobbying to avoid some of the law’s mandates. Last week, [...]
February 3, 2012 – 7:58 am
Today’s Wall Street Journal has a piece by Ian Berry about the possible restructuring of the CME’s rice futures contract. The design of the contract determines how effectively “farmers, elevator operators and beer brewers” can use the contract to do their hedging. The article is about problems that have shown in up in recent times [...]
