A new report by SunGard looks at the growing importance of trading technology in a market where energy and commodity prices react quickly and volatile to rapidly-changing market conditions.
According to SunGard, effective energy/commodity trading and risk management (E/CTRM) systems are more important to modern traders than they have ever been in the past.
Perfect Storm
SunGard describes what it calls a “perfect storm” in the energy and commodities markets that has created an environment of uncertainty and volatility. Until this perfect storm runs its course and global markets fully digest the changes by reaching a new equilibrium point, energy and commodity markets will continue to be volatile and unpredictable.
SunGard describes four elements to this energy and commodity perfect storm:
- Weakening energy and commodity demand due to slowing global growth.
- Overinvestment in production, which has led to an extended period of oversupply.
- A strong U.S. dollar, which has reduced the value of dollar-denominated commodities.
- Increasing regulatory intervention in commodities markets, which has disrupted the value chain.
The Study
SunGard conducted…
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