Market Volatility and Outright Price Increases are Creating Liquidity Challenges for Marketing and Trading Companies

Location

1000 Tournament Players Club Blvd
Ponte Vedra Beach, FL 32082
United States

Date
October 17, 2022
Type
Presentation
Event Type
Annual Conference
Presenters
Rob Smith
Daniel Pesikoff
Keith Nodskov
Christine Dirringer
Description

Energy prices across oil, gas and power have increased significantly over the past 18 months. This has presented challenges to increase liquidity for marketing and trading companies as existing credit facilities were capped for a lower price environment that had been present for several years. This session will discuss the actions these companies have taken to increase available liquidity through traditional forms of commodity trade finance, and newer alternative forms of collateral, and other offsets to increase liquidity and provide sufficient credit support on a bilateral basis. We will further discuss how hedging and exchange margining requirements are also playing a role in liquidity management and how trading companies are managing this risk on a daily basis.

 

Learning Objectives: Attendees will explore and gain an understanding of the basics of a borrowing base credit facility, the cash requirements and timing of cash flow for financially settled derivatives vs. physical commodity flow and payment settlement dates, and finally learn about alternative forms of liquidity that are available in the marketplace and how these can increase liquidity.

 

CPE – 1HR