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Chapter 36
Reading Title:
Reading Author(s):
 
 
Book Title:
Book Editor:
Chapter:
36
Page Range:
803-824
Total Pages:
22
 
 
Publisher:
Publication Year:
2008
Language:
English
 
 
 
 
FRM Paid Candidate Price:         US$3.00
Reading Price:
GARP Member (Non-Affiliate):   US$3.00
 
Affiliate & Non-Member:             US$5.00
 
* Order print copy for an additional US$2.00 + shipping & handling (select at checkout)
 
 
 
 
Quantitative Level:
Basic
 
 
Keywords:
 
 
Topics Covered:
Energy risk, natural gas
 
 
Reading Abstract:
This chapter describes the natural gas market in the United Kingdom from the perspective of gaining an understanding of the drivers of the principal traded commodity, which is physical and financial gas at the national balancing point (NBP). We pay particular attention to the relationship between the fundamentals of production, transportation and consumption, and the market and institutional arrangements. We find that while gas consumption has high weather sensitivity and potentially high elasticity, prevailing arrangements greatly reduce this elasticity, with a consequential elevation of price volatility. Efforts to improve demand side management are likely to change the demand fundamentals, and the related industry changes may increase the basis risk at the NBP. We also examine the high level relationships between gas and other commodities such as coal, oil, and carbon dioxide. These relationships are accessible in economic terms, but econometric analysis is challenging, as the relationships are periodic and variable as well as complex.
 
 
Reading Contents:
The Natural Gas Market in the United Kingdom
 
 
 
 
Book Review:
Filled with a comprehensive collection of information from experts in the commodity investment industry, this detailed guide shows readers how to successfully incorporate commodities into their portfolios. Created with both the professional and individual investor in mind, The Handbook of Commodity Investments covers a wide range of issues, including the risk and return of commodities, diversification benefits, risk management, macroeconomic determinants of commodity investments, and commodity trading advisors. Starting with the basics of commodity investments and moving to more complex topics, such as performance measurement, asset pricing, and value at risk, The Handbook of Commodity Investments is a reliable resource for anyone who needs to understand this dynamic market.
 



 
   
GARP Digital Library