Understanding the Supply Side Dilemma of Oil & Gas Commodities
The only ‘given’ for commodity trading experts is that oil and gas prices recently reached all time historical highs. Crucial questions about the supply side of the supply and demand matrix are largely unanswered.
By Ron Harrell, Chairman & CEO, Ryder Scott Company LP.

Mixed Fortunes Prevail for Platinum & Palladium
The market prospects for platinum and palladium remain mixed as the automotive industry celebrates 30 years of autocatalysts. The rapid spread of autocatalyst use has provided PGMs with a real and substantial source of demand of which other precious metals (read gold) can only be envious. With the developing world adopting ‘western’ emission standards, autocatalysts use, despite thrifting, will remain the lynchpin of demand.
By Guy Isherwood, Editor, Commodities Now.

Metals Data Integrity
In George Orwell’s prophetic novel 1984, Winston Smith spends his working life re-writing history to make it fit in with current thinking. Statisticians are frequently accused of changing the past to suit their own purposes. To what extent is this criticism fair in the reporting of metal statistics and how can reality checks be applied to keep us on the straight and narrow?
By Sue Eales, World Bureau of Metal Statistics (WBMS).

Energy Data Management
How has the Internet affected energy data management after all? Paulo Nery briefly explores the major changes given the expectations of the late 20th Century and looks at how things could yet change in the coming years.
Paulo Nery, marketing and business consultant, Kilo Marketing.

Alberta Oil Sands: Supply Security at the Right Price
We live in a world with a relentlessly growing demand for energy. Global geopolitical pressures and economics play important roles in the sourcing and development of energy and new strategic supplies. The availability of economical and secure supplies of energy – and crude oil in particular – is especially important to the US, a nation that consumes 25% of the world’s energy production.
By Alan M. Herbst, Principal with Utilis Energy, LLC.

Enterprise Wide Energy Risk Management – From Business Challenges
to Technology Solutions
This article focuses on how energy companies are capturing and then deconstructing the risk exposures in their complex portfolios. It also looks at how the enterprise wide (global) approach to risk deconstruction fits into the broader disciplines of effective risk management across an enterprise and seek to demystify EWERM and offer practical ideas for its implementation.
By Ilesh Patel, Senior Managing Consultant, SunGard Energy Systems.

Towards a Realistic Gas Storage Model
Many approaches to storage valuation make simplifying assumptions to make the model more tractable. Very often, realistic issues such as the Bid/Ask spread, discounting and, level-dependent rates (ratchets) and hard inventory level constraints are ignored or assumed away in these approaches. In light of these and other common issues that can severely affect storage value, the financial-based valuation of gas derivatives needs to step up to the plate. Moreover, as the bulk of the gas market’s ebb and flow revolves around the use of storage for reliability, these punitive market issues must be dealt with in a realistic manner to arrive at comfortable valuation, hedges and decision support for the management of storage assets. Critically, storage valuation must be consistent with the physical constraints of the storage field.
By Dr. Josh Gray, Senior Derivatives Specialist and Dr. Pankaj Khandelwal, Financial Engineer at Financial Engineering Associates (FEA).

Special Feature: EU Accession

EU Commodity Markets
The new EU-25 offers many opportunities for both existing and new Members. The commodity sectors of the newly expanded Europe will be affected in a number of ways. Here we profile the power and gas, agricultural, and steel markets – shedding light on the effects of enlargement. We also look into the current status of the establishment of the EU Emission Trading System as its establishment will affect industry throughout commencing next year.

EU-25 Power Markets
The EU power market has survived the shattering of confidence produced by the Enron debacle and the withdrawal of a number of key players from its borders. But after reaching lows in 2002/03, confidence has been restored to this increasingly important energy marketplace.

Natural Gas in Accession States
What do the EU's new member states bring with them in the way of natural gas infrastructure, and how will they adapt to the rapidly liberalising EU gas market? The EU’s new members are now on the same regulatory timetable as the EU15 and they appear as committed to reforming their gas markets as most western European countries. The Baltic states will be hampered by their total dependence on Russian gas and lack of connectivity with the rest of Europe. But the main central European block of accession countries now seems as likely a location for the development of an open, competitive, short-term market in gas as anywhere else in Europe. The speed with which the region has transformed its gas industry – and is continuing to do so – has been remarkable. The Czech Republic, Hungary, Poland and Slovakia look set to rapidly become as significant in the European gas market as many EU15 Member States.

Big Benefits Expected for Steel Makers in EU Accession Countries
The massive extension eastwards of the European Union is very significant for the steel sector. The global steel scene has changed dramatically since the beginning of this year. A degree of panic buying has developed in most parts of the world. Shortages are now being reported as the mills attempt to meet their increasing order books. This has created a scramble for raw materials and deficits are reported for all the major inputs for steel making, including scrap, iron ore and coke. Steel prices are climbing rapidly, as a result, and adding to the over-ordering of most products. Moreover, shipping costs are increasing as vessels are tied up in many Asian ports awaiting discharge – an unprecedented situation.

EU Agricultural Outlook
Following the enlargement of the European Union and the creation of a single market of 455 million consumers, agricultural trade in the EU-25 could grow significantly, maintaining its principally easterly direction.

EU Emissions Trading Scheme: Building Bridges
A new EU Directive will build a link between the EU greenhouse gas emissions trading scheme and the international market for emissions credits – and the impact will be felt worldwide.

EU ETS Risk Management
In the global carbon markets of early 2004, the EU-25 Member States are the centre of attention. The long period of rhetoric over details of legislation and National Allocation Plans (NAPs) is coming to an end (for some) and European industry now has a clear signal that emissions trading is going to be important for their future. For those affected, planning an effective trading and risk management strategy under the EU Emissions Trading Scheme (ETS) is crucial.

Global Awards:

2004 Key Women In Energy™ – Global Awards
Fifty outstanding women, representing 21 countries, were presented RaderEnergy’s 3rd annual Key Women in Energy™ - Global awards for 2004 for exceptional individual contributions to the energy sector, and/or individual or joint contributions to either energy or to services and programmes that support the energy sector. Candidates for the awards were selected from nearly 425 nominations submitted for consideration, representing approximately 45 countries and nationalities.
By Linda K. Rader, Rader Energy.