Derivatives Are Becoming a Problem… Again

by | published March 16th, 2018

Recently, I gave a briefing to some finance folks associated with the trading of global oil.

The topic was the escalating problem with derivatives in that trade, and the difficulty that usage was creating in determining a market value for the underlying commodity.

We have discussed this matter a few times here in Oil & Energy Investor.

However, a recent uptick in the intermediary paper used to arbitrage oil trade – that is, bringing the values of a “paper barrel” (a futures contract) with a “wet barrel” (the actual consignment of oil in the market) together when the former is expiring – has created a concern.

The matter is getting worse, masked only by the prolonged period of languishing crude prices that is now coming to an end

Despite “Big Freeze” Woes, The Worst is Yet to Come for the U.K. Gas Crisis

by | published March 13th, 2018

For the ministers and officials assembled, it was an embarrassment all around.

Late last week, as we were at the annual Windsor Energy Consultation (WEC) just outside London, British Gas Plc confirmed that the nation was facing a natural gas shortage as freezing temperatures grip the country.

You see, blizzards, strong winds, drifting snow, and bitter cold recently brought Britain to a standstill as the weather system nicknamed the “Beast from the East” combined with winter storm “Emma” to create some of the most testing weather the U.K. has had to face in years.

Now, I can attest first hand that this cold snap was not something to take lightly.

As a regular attendee of the Windsor Energy Consultation over the past decade, a visit that includes spending three days each year at the royal residence, I know that Windsor Castle can be drafty in any weather.

But this time around, it was positively frigid.

And nationwide, this “big freeze” has brought to light a very serious problem.

And it’s one that is only getting worse