Let's (not) get physical

Another year of low volumes, another year of missed budgets; as was the case in 20l2, the past l2 months have been a lean time for commodity derivatives businesses. Volatility in underlying energy markets remained muted and client activity was disappointing, say dealers. The trend was exemplified by...

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Bibliographic Details
Published in:Risk (London. 1987) 2014-02, p.30
Main Author: Carr, Gillian
Format: Magazinearticle
Language:English
Subjects:
Banking industry
Banks
Commodities
Commodity markets
Crude oil
Derivatives
Economic crisis
Energy industry
Investment banking
Natural gas
Precious metals
Regulation of financial institutions
Regulatory approval
Volatility
Wall Street Reform & Consumer Protection Act 2010-US
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Summary:Another year of low volumes, another year of missed budgets; as was the case in 20l2, the past l2 months have been a lean time for commodity derivatives businesses. Volatility in underlying energy markets remained muted and client activity was disappointing, say dealers. The trend was exemplified by crude oil, with Brent North Sea crude oil finishing the year at $110.80 a barrel -- almost the same as its 2012 closing level. Three-month volatility implied by options on Brent stood at 17% by the end of 2013 -- a drop of 7% compared with the end of 2012 and a record low, according to a January 6 report by analysts at Goldman Sachs. More than five years after the 2008 financial crisis, many firms are also still trying to work out what a Web of new regulation means for them, including strengthened bank capital standards from the Basel Committee on Banking Supervision, the US Dodd-Frank Act and the European Market Infrastructure Regulation.
ISSN:0952-8776