Energy Sector

Beaumont Oil Exchange in Texas shown with men standing on the porch and sitting on the steps. — *Oil Exchange [Spindletop, Beaumont, Port Arthur, and Vicinity, Texas - Oil Industry]*. c1901. Library of Congress Prints and Photographs Division.

Energy prices matter to everyone. Energy is a basic factor of production, and it provides light, protects people from cold and heat, and powers all transportation and modern technology. The energy business is a risky business. In addition to the usual financial and business risks, energy businesses face other risks from accidents, such as those from explosion, fire, or leakages; earthquakes and major storms; war and terrorism; increasing regulation; and expropriation.

The industry consists broadly of fossil fuels and alternative energy. Fossil fuels comprise oil, natural gas, and coal. Although a metal, uranium is treated as part of this industry. The alternative energy industry includes solar, wind, water, biomass; geothermal and fuel cells. Electricity is a secondary source of energy, generally powered by a fossil fuel. These energy sources must be produced, transported, and distributed to consumers non-stop in a global market. Each source requires expensive infrastructure along the entire chain of production and distribution.

Energy markets and the associated derivatives markets are characterized by sudden jumps, reversion to their mean, and price volatility that varies over time. Each source has unique properties and applications leading to its own demand and supply characteristics. In addition, other factors drive price: macroeconomic factors such as economic activity, reserves, the existence of substitutes and their prices; supply chain issues, such as refining capacity, storage capacity, and pipelines or tankers; and geopolitical factors such as war and embargos. The primary energy derivatives are futures, forwards, options, and swaps.

The following materials link to fuller bibliographic information in the Library of Congress Online Catalog. Links to digital content are provided when available.

Commodities, Energy and Environmental Finance by Michael Ludkovski (Editor); Ronnie Sircar (Editor); René Aïd (Editor)
Call Number: QA273.6 .C648 2015
ISBN: 9781493927326
Published/Created: 2015-07-01
This volume is a collection of chapters covering the latest developments in applications of financial mathematics and statistics to topics in energy, commodity financial markets and environmental economics. It is based on the presentations and discussions that took place during the Fields Institute Focus Program on Commodities, Energy and Environmental Finance in August 2013. The authors include applied mathematicians, economists and industry practitioners, providing for a multi-disciplinary spectrum of perspectives on the subject. There are four sections: Electricity Markets, Real Options, Trading in Commodity Markets, and Oligopolistic Models for Energy Production. The chapters provide a summary of quantitative analysis of commodities and energy finance, and discuss structural models of electricity markets, financialization of commodities, valuation of commodity real options, game-theory analysis of exhaustible resource management, and analysis of commodity ETFs.
The Economics of Oil and Gas by Xiaoyi Mu
Call Number: HD9560.5 .M78 2020
ISBN: 9781911116271
Published/Created: 2019-12-03
The availability of low-cost energy from fossil fuels has been the driving force behind postwar global economic growth. This book examines the economics of the entire value chain of the oil and gas industry, from exploration, development and production, to transportation, refining and marketing. It explores the key economic costs, considerations and appropriate business strategies at each stage in order to provide a comprehensive picture of the workings of the petroleum industry. It examines some of the unique economic challenges the industry faces, including negotiating international contracts with host countries (to gain access to hydrocarbons), managing the risks of recovery, implementing cross-border pipelines, dealing with huge variations in the taxation of refined products, and reacting to the effect of price control and subsidization in the OPEC nations. In addition, it describes how the search for low-carbon fuels, the impact of shale gas, the prospect of finite reserves, and the global political realities of the competing demands of oil importing and oil exporting countries amplify risk in the sector.
Energy Power Risk by George Levy
Call Number: HD9502.A2 L486 2019
ISBN: 9781787435285
Published/Created: 2018-12-10
Energy Power Risk: Derivatives, Computation and Optimization is a comprehensive guide presenting the latest mathematical and computational tools required for the quantification and management of energy power risk. It provides insights into the latest practices and methodologies used in today's markets to create innovative quantitative models for energy and power risk and derivative valuation. It begins with an introduction to the mathematics of Brownian motion and stochastic processes, covering Geometric Brownian motion, Ito's lemma, Ito's Isometry, the Ornstein Uhlenbeck process and more. It then moves on to the simulation of power prices and the valuation of energy derivatives, before considering software engineering techniques for energy risk and portfolio optimization. The book also covers additional topics including wind and solar generation, intraday storage, generation and demand optionality. It is a reference for quantitative analysts, financial engineers and other practitioners in the field of energy risk management, as well as researchers and students interested in the industry and how it works.
Energy Trading & Investing: Trading, Risk Management, and Structuring Deals in the Energy Markets, Second Edition by Davis W. Edwards
Call Number: HG6046 .E39 2017
ISBN: 9781259835384
Published/Created: 2017-02-06
Volatile energy prices and a rapidly changing energy industry provide investment opportunities for savvy investors and dangers for the uninformed. Energy Trading and Investing discusses topics ranging from traditional and emerging markets to need-to-know financial principles and proven investing strategies. Davis Edwards provides detailed information on every topic important to energy investors, including: natural gas, electricity, petroleum, coal, weather, and emissions markets; details on financial products like futures, forwards, swaps, and options; deal structuring; examples explaining spread options, spatial load forecasting, and tolling agreements. He provides coverage of specialty electricity markets - capacity, financial transmission rights (FTRs), power purchase agreements (PPAs), and ancillary services; explanations of natural gas transportation, storage, and swing option contracts; and a practical introduction to market risk, credit risk, and model risk management. Jargon from both the financial industry and energy market is fully explained and the math is made accessible to the average reader.
Fundamentals of Trading Energy Futures and Options by Luc Marest; Steven Errera
Call Number: HG6047.P47 P77 2018
ISBN: 9781593703264
Published/Created: 2018-07-23
Trading in energy futures and options plays a key role in hedging against fluctuations in the price of energy commodities, especially crude oil and natural gas. This new edition highlights how exchange-traded futures and options markets work and how to successfully use the markets to advance an overall profit strategy. The authors also discuss market efficiency, the role of commodities in Modern Portfolio Theory, and the NYMEX introduction of Clearport.
Market Madness by Blake C. Clayton
Call Number: HD9560.5 .C5675 2015
ISBN: 9780199990054
Published/Created: 2015-02-02
When oil prices soar because supplies are failing to keep up with demand, the response is nearly always apocalyptic. Predictions of the end of oil have always proven wrong. Market Madness is the story of four waves of American anxiety over the last 100 years about a looming end to oil reserves. Their sweeping pattern of large price increases that eventually dissipate when oil production rises and prices moderate has defined the the oil market down to the present day. Blake Clayton makes the case that better information, communication and transparency would mitigate unnecessary price spikes and improve investor and government decision-making. This is the first study to employ Nobel Laureate economist Robert Schiller's "new era economics" beyond the 1990s dot-com equity market and the mid-2000s housing market to better understand the dynamics of speculative bubbles and irrationality in the commodities markets.

Related Research Guides

Oil and Gas Industry: A Research Guide - This guide covers the business of oil and gas, including its history, regulations, production, transportation and storage, marketing and distribution, statistical sources, and companies.

This guide covers the business of oil and gas for researchers interested in the history, regulations, production, transportation and storage, marketing and distribution, statistical sources, and company research.

Renewable Energy Industries: A Research Guide - This guide covers the business of generating and distributing renewable energy from hydropower, solar, wind, geothermal, and biomass sources.

This guide to researching the business of generating and distributing renewable energy focuses on resources related to hydropower, solar, wind, geothermal, and biomass industries as well as the electric power sector in the United States.

Commodities: A Resource Guide

Energy Sector

Related Research Guides

Oil and Gas Industry: A Research Guide - This guide covers the business of oil and gas, including its history, regulations, production, transportation and storage, marketing and distribution, statistical sources, and companies.

Renewable Energy Industries: A Research Guide - This guide covers the business of generating and distributing renewable energy from hydropower, solar, wind, geothermal, and biomass sources.