That is not good news for energy market Risk Managers. Volatility tends to focus management's time and attention on the news of the day and short term earnings cycles, instead of long term strategic and competitive issues. Certainly the hedging dimensions offered by futures markets should be a key part of a risk management strategy to manage those critical costs, revenues, price differentials and margins making up the enterprise business plan. Equal scrutiny should be directed at raw materials and product pricing formulas to evaluate fixed and variable price exposures, and margin exposures across processing operations. The advantage of reduced basis risk is particularly important in highly volatile markets where hedge correlations are frequently broken.
Increased volatility makes everyone's job harder across the front, mid, and back office functions.
It places much greater emphasis on having the right technology, good teamwork, and the proper training to get the job done effectively . Even in these technologically advanced working environments, your employees are the determining factor of how well the enterprise responds to change. Indeed, employees are the most important resource in creating value and a lasting competitive advantage. Therefore it is important that every employee's knowledge and exposure to new ideas be refreshed and expanded on an ongoing basis through training in order to successfully deal with the dynamics of today's energy markets. The Oxford Princeton Programme's gold , silver , and blue levels of training are ideally suited to help your company overcome the obstacles presented by energy price volatility.