The commodities roller coaster: Liquidity and market structure in volatile markets

Commodity markets never rest. The recent fall in oil prices and renewed expansionary monetary policies are increasing uncertainty on how these markets will once again react to economic and financial instability. This environment comes on the back of a more generalised reduction or stagnation in commodity prices and an ongoing policy overhaul. How is commodity market structure reacting to those changes? Is price volatility affecting hedging opportunities? Is the new price environment reducing appetite for policy action? How are financial reforms developing in this area? Have banks lost interest in commodities trading, and why?

Programme

 12:30  Registration & Lunch 13:30 Welcome remarks 13:35 Session 1. Liquidity in commodity finance

The session will discuss how volatile market conditions affect availability of hedging tools. As banks change their business models and review their participation in physical and paper commodity markets to support the long-end of the curve, other actors, such as commodity trading houses, advance and re-shape their business to cope with the 'new normal'. Have volatile market conditions created a liquidity gap in financing commodity trading? What kind of role will policy actions play? 

Speakers:

• Christophe Salmon, Chief Financial Officer EMEA, Trafigura
• András Hujber, Policy Officer, DG ENER, Wholesale Markets; Electricity & Gas
• Jan-Maarten Mulder, Global Head of Commodities, ABN Amro
• Paul Willis, Technical Specialist - Commodities / Markets Policy Division, Financial Conduct Authority
• Bjørn Sibbern, Senior Vice President Global Trading & Market Services, NASDAQ OMX
• Jonathan Hill, Regulatory Policy Analyst, BP
• Moderated by Neil Hume, Commodities Editor, Financial Times

15:15Coffee break 15:30Session 2. The sinking barrel: How price can change market structure

Prolonged changes in price levels can have long-lasting effects on the supply and demand structure. The drop in oil prices threatens to scale down investments in unconventional sources and ultimately change energy policies around the globe. Oil prices may also have an impact on other commodities markets with unexpected effects on the futures curve (contango) and market structure. The commodity value chain is rather complex and important price adjustments may have different effects whether you look downstream or upstream. Can current volatile market conditions produce a long-lasting change in some commodities markets? And how?

Speakers:

• Craig Pirrong, Professor of Finance, Bauer College of Business, University of Houston
• Giacomo Luciani, Adjunct Professor, Co-Director of the Executive Master in International Oil and Gas Leadership, Graduate Institute
• Istemi Berk, Research Associate, Institute of Energy Economics, University of Cologne
• Moderated by Neil Hume, Commodities Editor, Financial Times

17:00 End of the conference

Registration

• Participation in ECMI-CEPS meetings is a benefit of ECMI and CEPS membership. ECMI and CEPS members register free of charge. EU and national officials, academics (including PhD students), NGOs (not representing a commercial interest) as well as press are also admitted free of charge.
• Other participants may be admitted for €175 (VAT inclusive, payable in advance). If you have questions regarding membership or participation, please contact karin.lenk@ceps.eu before registering.