US Energy Deep Dive
The Deep Dive is your source for understanding the US retail energy market, from provider strategies to regulatory shifts. Tune in for expert commentary and analysis on the competitive electricity and natural gas industries.
US Energy Deep Dive
Energy Trading and Capital Markets
The provided text offers a comprehensive overview of trading and capital markets within the energy sector, focusing on natural gas and electricity. It begins by explaining how market restructuring led to the expansion of commodity markets and the development of financial products derived from underlying energy products. The text then details the characteristics and types of physical and financial contracts, such as forwards, futures, swaps, and options, outlining their unique features like product conveyed, location, timeframe, quantity, and pricing mechanisms. Furthermore, it explores the various trading venues, including exchanges, Over-the-Counter (OTC) markets, and RTO/ISO markets, emphasizing their operational differences and transaction processes. Finally, the document discusses capital markets and their significance in funding energy infrastructure, differentiating between equity and debt financing and highlighting the role of credit ratings in assessing financial risk for market participants.