Fri 12 Aug 2011 14:41

Report forecasts volatile prices ahead


Companies are urged to consider using the 'expected volatility' to enter hedging agreements.



In light of recent market events, Danish firm A/S Global Risk Management has published its latest financial update for the month of August.

In the document, Global Risk forecasts volatile oil prices ahead and makes the following key points in its executive summary:

* Downgrade of US will not mean default – however higher interest is to be expected.

* Higher rates means lower growth – and thus lower oil consumption.

* ECB to copy-paste FED on QE – dangerous waters.

* German sovereign debt – flight to quality.

* Debt to GDP – not always a ratio to control a country’s leverage.

* Long term – watch those cash holdings.

In the financial update Global Risk also says: "Market memory is often very short, and especially where a huge number of speculators and computer trading are involved. We therefore expect oil prices to increase in volatility over the coming months. As September and October are months where equities and oil usually move upwards, we recommend clients to consider using the expected volatility to enter hedging agreements."

Looking in the long-term, the company commented: "In a longer timeframe we urge clients to consider the rather large cash holdings laying around in hedge funds and banks. At the first sign of the slightest turn in the underling economy, they will jump into oil once again, sparking volatility. The final remarks in this financial Update goes to John Maynard Keynes (1883-1946): 'The market can stay irrational longer than you can stay solvent'."

Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.

Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.

Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.

Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

Stanley George, VPS Group Technical and Science Manager, VPS. How to engineer and manage green shipping fuels | Stanley George, VPS  

Effective management strategies and insights for evolving fuel use.

Sweden flag with water in background. Swedish government bans scrubber wastewater discharges  

Discharges from open-loop scrubbers to be prohibited in Swedish waters from July 2025.

The ME-LGIA test engine at MAN's Research Centre Copenhagen. MAN Energy Solutions achieves 100% load milestone for ammonia engine  

Latest tests validate fuel injection system throughout the entire load curve.

Terminal Aquaviário de Rio Grande (TERIG), operated by Transpetro. Petrobras secures ISCC EU RED certification for B24 biofuel blend at Rio Grande  

Blend consisting of 24% FAME is said to have been rigorously tested to meet international standards.

Avenir LNG logo on sea background. Stolt-Nielsen to fully control Avenir LNG with acquisition  

Share purchase agreement to buy all shares from Golar LNG and Aequitas.

Seaspan Energy's 7,600 cbm LNG bunkering vessel, s1067, built by Nantong CIMC Sinopacific Offshore & Engineering Co., Ltd. Bureau Veritas supports launch of CIMC SOE's LNG bunkering vessel  

Handover of Seaspan Energy's cutting-edge 7,600-cbm vessel completed.


↑  Back to Top


 Related Links