Hedging of Natural Gas on Selected Markets
Hedging of Natural Gas on Selected Markets

Author(s): Luděk Benada, Dagmar Linnertová
Subject(s): Business Economy / Management, Energy and Environmental Studies, International relations/trade, Economic development
Published by: Masarykova univerzita nakladatelství
Keywords: hedging; hedge ratio; spot; futures; forward;
Summary/Abstract: The following study focuses on one of the key primary energy commodities in the modern society. Two independent and different regional markets for natural gas are compared from the hedging point of view. The market of considered commodity is unique in its characteristics. In the paper will be examined the possibility of price risk hedging on two different markets with distinct level of market maturity and characteristics. One of markets is represented by the system of endogenous price mechanism while the other one is based on price indexed mechanism. The analysis will be carried out on US and European market of natural gas. In both cases, the methodology will be focused the short hedge position.

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