What is a Forward Curve? A Beginner’s Guide (Part 1)

The industry that drives global commerce and ensures our highest standards of living is underpinned by the complex and fascinating world of commodity trading. Without commodity trading, our lives would be vastly different. The exchange of physical commodities like crude oil, natural gas, metals and power guarantee that we can do everything from turning the lights on, to receiving packages in the mail, to charging our cell phones. The intricacies of commodity trading are hard to grasp without the right language, and several of the terms and definitions used by traders are unique from those used by the buyers and sellers of other assets like stocks, bonds, equities or even cryptocurrencies. Since forward curve management stands at the foundation of Enverus’ key risk management solutions for the energy industry, I figured it might be helpful to take a step back and define what a forward curve is, and why it’s integral to any trading operations’ bottom line. We all have to start somewhere. This post is dedicated to the newbies. What is a forward curve, and why is it important for risk management?   Simply put, a forward curve is a snapshot representation of what a commodity is currently worth… continue reading

Continue reading What is a Forward Curve? A Beginner’s Guide (Part 1). This article appeared first on CTRM Center.

Source: CTRM Center

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