The world is transforming before our eyes. New market realities at play for energy risk managers were unthinkable before the emergence of COVID-19 and risk management has never been more important to energy and commodity traders.
From 2020 onward, the people who analyze price risk will throw away their old playbooks. Risk analysts must push boundaries to protect their companies from the unforeseen risks and drastic price volatility that comes with surviving the market conditions of a pandemic.
When COVID-19 first spread across the globe, companies transitioned to remote trading operations. Workforces are now acknowledging that employees will have more flexibility to work remotely—or some hybrid of remote and in-office—for the foreseeable future.
IT departments are stretched especially thin and forced to put projects on hold. The new working environments have exposed antiquated curves and dataflow processes managed out of Excel. On top of that, many shops have only one or two key people that know the ins and outs of that process—a big risk. Data lineage issues could completely throw off an entire system if a formula or data point is off in any way.
Now that we have seen the worst of market volatility and negative WTI futures, we know that the impossible can happen. Intraday price changes are bigger and volatility is expected to continue to roil markets for at least the next two years. Risk management and forward curves management just became monumentally more important.
Companies really want that out-of-the-box, easily customizable technology that can help them simplify their forward curves process without significant internal IT support or maintenance. They also want to partner with an expert team that can handle most of the integration and management—avoiding additional workload for internal IT—to make it as painless as possible.
We’ve created a new e-book that addresses these issues and aims to give risk managers a comprehensive, macro view of oil markets and how volatility could impact risk management. It also provides first-hand perspective from experts who build customized and automated forward curve risk management systems every day. Sign up here to download a complimentary copy of the report.