The Energy Trading High Wire
Sky-high prices have made energy trading look like easy money. Look again.
In recent months, Credit Suisse Group and Lehman Brothers Holdings Inc. have piled into the business, witnessing the billions of dollars that competitors at Goldman Sachs Group Inc. and Morgan Stanley have made as Wall Street's two top commodities players.
Numerous hedge funds -- including the $2 billion-plus Old Lane LP being launched by former Morgan Stanley executives Vikram Pandit and John Havens -- also are joining the fray on behalf of wealthy clients trying to profit from swings in the prices of crude oil, natural gas, electricity and even pollution-emissions credits.
The activity is reinvigorating some markets that dried up in 2002 after energy-trading behemoth Enron Corp. collapsed. Competition to hire traders away from power utilities and oil-trading desks is intense.
Some of the new investments have resulted in home-run profits, but painful strikeouts show that energy trading is as tricky as it is popular.
OIL SLICK
? Heard on the Street: Refiners Are Still Riding High
A few months after hiring some high-profile Morgan Stanley gas and electricity traders to expand its commodities business, J.P. Morgan Chase & Co. said in January that bad energy bets helped clip fourth-quarter earnings. J.P. Morgan also has been a large buyer, either for itself or for clients, of pollution-emissions credits, the prices of which plunged earlier this year. Hedging strategies may have mitigated losses. Chief Executive Jamie Dimon has said that its energy business last year still made three times what was expected.
The Barclays Capital unit of Barclays PLC, a fast-growing commodities operation, in recent months parted ways with two crude-oil traders over how they had valued how much they had at risk in options, traders familiar with the episode say. A Barclays spokeswoman declined to discuss the departures.
A steeper-than-expected dive in natural-gas prices since December has rattled traders already licking wounds from autumn's jagged market. Gas and electricity bets that went sour in the days before and after Hurricane Katrina cost hedge funds Citadel Investment Group about $150 million and Ritchie Capital $100 million, people familiar with the firms say. Citadel has more than $12 billion under management; Ritchie has about $2.8 billion. The two Chicago-area funds have since hired new energy-trading heads and gained back some of their losses, these people say. A Citadel spokesman says last year's hurricane season was one of the few times the firm's energy business wasn't profitable.
Energy trading is alluring for the same reason it is so risky: volatility. Unpredictable factors like weather and geopolitical unrest always have driven the cost of energy. But prices of energy futures -- contracts to deliver commodities for a set price at a later date -- are bouncing around like never before, multiplying the opportunities and risks as volatility in other markets falls.
Crude-oil prices rose from the mid-$40s a barrel last May on the New York Mercantile Exchange to $68 in January and closed yesterday at $60.42.
Swings in natural-gas prices have some traders calling that market "Gas Vegas." Natural gas roughly doubled from its summer price after Hurricane Katrina to $14.33 per million British thermal units on Oct. 25, then fell before peaking Dec. 13 at $15.38. It has been on a nearly relentless free fall since, hovering near $6.50 much of this month before a rebound. Yesterday the price stood at $6.835.
"That's like the Dow going from 10000 to 25000 and back to 10000," says Foster Smith, head of U.S. gas and power trading at Deutsche Bank AG. "We've had a colossal round trip in about a 10-month time span."
Being on the correct side of that whipsaw is intoxicating. Amaranth LLC, a $7 billion hedge-fund firm in Greenwich, Conn., made several hundred million dollars trading natural-gas futures and fared well during the decline, people familiar with its activities say. A significant portion of the fund's approximately 18% return last year was because of energy bets, one of its investors says.
Houston-based Centaurus Energy LP, a $1 billion fund founded by Enron alumnus John Arnold, turned a nail-biting December into a blockbuster with a correct bet on natural gas's downhill slide, Wall Street trading officials say. According to SparkSpread.com, a Web site that tracks energy trading, his fund was up 160% for 2005, giving investors a 100% return after fees. Mr. Arnold declines to discuss returns.
"No one wanted to be an energy trader 20 years ago -- it was the least sexy thing in the world," says John D'Agostino, a former executive with the Nymex, the world's main energy-trading market. "Fast forward to today: Investors are lining up at the door. [But] if you're going to invest in energy, you'd better be comfortable with volatility."
In early 2005, Mr. D'Agostino founded energy hedge-fund MotherRock LP with former Nymex President J. Robert "Bo" Collins and former Nymex trader Conrad Goerl. The fund returned 23% in 2005, according to SparkSpread.com.
A big factor in the volatility is soaring demand from developing countries like China and India at a time when production isn't rising as much as it had been and when finding big untapped energy deposits is getting harder. Unrest in energy-rich Nigeria and worries about Iran's nuclear ambitions also play their parts.
Another factor is the surge in investor speculation. Hedge funds are taking ever-larger bets in a futures market that is smaller than the stock or bond markets, and the funds are using borrowed money to maximize their bets, magnifying the impact on prices. They are also trading heavily in short-term futures that call for delivery in just a few months rather than a year or more, a practice that also can push prices around.
Natural gas is especially tricky. Economic growth and the commodity's environmental benefits over coal have caused demand to climb in recent years. The blue vapor, shipped via pipelines, is a main fuel for electricity generation -- especially in times of high demand -- and for plastics and fertilizer production. Moreover, nearly 60% of U.S. homes use it for heat. That makes its price especially sensitive to weather.
Gas and electricity traders often bet on the difference in power prices in regions of a country that use different levels of coal and gas. Many bets are based on long-term seasonal trends, but energy experts say last year's hurricanes disrupted these trends. Gas and power prices initially spiked because supply from the energy-rich region was disrupted. But industrial plants in the area were damaged by the storm and stopped operating temporarily, while New Orleans effectively shut down -- driving down demand.
"A lot of hedge funds trade the historics," says Peter Fusaro, co-founder of the Energy Hedge Fund Center, a research and risk-management consulting firm. In 2005, "these financial models were not predictable models."
暴富与巨险之间
青云直上的能源价格让能源交易成了一种看上去很轻松的赚钱行当。真地是这样吗？
瑞士信贷(Credit Suisse Group)和雷曼兄弟(Lehman Brothers Holdings Inc.)近几个月来已跻身这一领域，而在他们之前，他们的竞争对手、身为华尔街两大一流商品交易机构的高盛(Goldman Sachs Group Inc.)和摩根士丹利(Morgan Stanley)已有数十亿美元的进帐，可谓盆满钵满。
许多对冲基金也代表他们那些富有的客户加入到这场财富争战中，从原油、天然气、电力乃至污染排放权交易价格的大幅波动中寻找盈利。这些基金中包括前摩根士丹利人士潘伟迪(Vikram Pandit)和约翰?黑文斯(John Havens)推出的资产规模达20亿美元的Old Lane LP基金。
自能源交易巨头安然(Enron Corp.)崩溃后、到2002年已逐渐枯竭的部分市场在上述这些活动的带动下正在焕发生机。各家公司你争我夺地竞相从电力公司和石油交易机构聘用交易人员。
能源游戏
? 华尔街见闻：炼油类股又将迎来丰收年有些新投资已带来了丰厚的利润，但也有一些项目损失惨重、狼狈出局，显示出火爆的能源交易背后极难把握的一面。
摩根大通(J.P. Morgan Chase & Co.) 1月份曾表示，能源交易上的挫折使其第四季度利润遭到削弱。在那之前的几个月，它从摩根士丹利那里聘请到一些很有名气的天然气和电力交易员加盟自己的商品业务部门。
JP摩根也已成为一个污染排放权大买家，它既有自营业务，也代客户买卖。今年早些时候排放权价格大幅跳水。采取对冲策略或许在一定程度上降低了损失。不过该公司首席执行长杰米?戴蒙(Jamie Dimon)说，其能源业务去年的业绩是预期的三倍。
Barclays PLC旗下的Barclays Capital聘用的两名交易员近几个月离开了公司，据业内知情人士说，原因是他们对期权产品风险大小的评估与公司有分歧。Barclays发言人拒绝评论此事。
因去年秋天天然气价格跌宕而受挫的交易员旧创未愈，新伤又来，12月份以来天然气价格跳水幅度大大高于预期。据知情人士说，在爆发卡特里娜飓风前后所作的天然气和电力交易让对冲基金Citadel Investment Group和Ritchie Capital分别损失了1.5亿美元和1亿美元。
Citadel旗下管理著120亿美元的资产；Ritchie的资产额在28亿美元左右。据称，这两家均位于芝加哥的基金公司后来重新聘用了能源交易部门主管，并挽回了部分损失。
Citadel发言人说，去年的飓风季节是他们为数不多的几次能源业务出现亏损的季度。
能源交易之所以诱人而又充满风险，其背后的原因都是源于同一因素，即波动性。诸如天气和地区形势等不可预见的因素总是会推动能源价格变动。但是，目前能源期货价格的波动力度超过以往任何时候，在其他市场的波动性下降的时候，期货市场的机会和风险却在成倍放大。
纽约商交所原油价格从去年5月份的每桶45美元左右上涨到今年1月的每桶68美元，周一收盘时报60.42美元。
鉴于天然气价格的剧烈波动，一些交易员将天然气市场戏称为Gas Vegas（注：Gas指天然气；美国赌城拉斯维加斯的英文名是Las Vegas）。卡特里娜飓风过后，10月25日时天然气价格较夏天时的水平上升一倍左右，达到每百万英国热量单位14.33美元；随后转跌，到12月13日时又升至15.38美元。随后又开始了一波自由落体般的近乎不间断地下跌，本月以来大部分时间徘徊在6.50美元左右，后稍有反弹。周一的价格报6.835美元。
德意志银行(Deutsche Bank AG.)美国天然气和电力交易部门负责人福斯特?史密斯(Foster Smith)说，那个过程就像道琼斯指数从10000点升到25000点，再从25000点跌回到10000点。在大约10个月的时间里，我们见证了市场价格大幅度的起起落落。
在这一过程中，能一直处在获利的一方是一件非常让人兴奋的事。知情人士说，管理著70亿美元资产的Amaranth LLC在天然气期货交易中获利数亿美元，且在市场下跌时顺利脱险。该基金去年总体投资回报率约为18%，它的一家投资者说，其中很大一部分来自能源交易。
由曾在安然供职的约翰?阿诺德(John Arnold)创立的休斯顿基金公司Centaurus Energy LP在去年12月众人焦头烂额之际却“大发横财”，华尔街交易界人士说，原因是它成功预见到了那波下跌行情。据跟踪能源交易的网站SparkSpread.com称，阿诺德的基金2005年上涨了160%，扣除费用后的投资回报率达到了100%。但阿诺德拒绝就回报率问题置评。
前纽约商交所管理人士约翰?达戈斯蒂诺(John D'Agostino)说，20年前，没有人想做能源交易员，大家觉得那是世界上最无聊的工作了。但今天有了很大变化，投资者都排队等在门外呢。但是，如果你想涉足能源投资，你最好能对市场波动有一定承受力。
在2005年初，达戈斯蒂诺与纽约商交所前总裁罗伯特?克林斯(J. Robert Collins)和前交易员康拉德?格尔(Conrad Goerl)创立了对冲基金MotherRock LP。据SparkSpread.com的数据，2005年，该基金的回报率是23%。
导致市场巨大波动的一个重要因素是，来自中国和印度等发展中国家的需求急剧飙升，而同期的产量并未能以同样速度上升，而且未开发的能源储备越来越难以找到。此外，尼日利亚等富油国的动荡局势及对伊朗核计划的担忧也起到了推波助澜的作用。
另外一个因素是投资者中间投机心理的上升。在规模远小于股票和债券市场的期货市场上，对冲基金的运作力度却比在股市和债市上大得多，而且他们是用借来的钱最大限度地下注，这放大了对价格的影响。他们还大量投资离交割期只有几个月的短期期货，这种做法也会加剧价格波动。
天然气价格尤其诡异。经济增长及天然气相对于煤炭在环境上的优势推动天然气需求近年大幅爬升。它已成为发电和塑料、农药行业生产的主要燃料。而且，美国接近60%的家庭都采用天然气供暖。这使天然气价格对天气非常敏感。
天然气和电力交易员还经常利用一个国家各地区因煤炭和天然气使用水平不同而形成的价格差来进行套利交易。许多交易是基于长期以来的季节性规律，但能源专家指出，去年的飓风使这些规律被打乱了。
天然气和电力价格最早开始急升是因为能源富足地区的供应发生中断。但这些地区的工厂被风暴所破坏、进而暂时停止了经营，而新奥尔良整个城市实际上基本停止了运转，这也使该地区的需求大大降低。
从事风险管理咨询的研究机构Energy Hedge Fund Center的联合创始人彼得?富萨罗(Peter Fusaro)说，许多对冲基金根据历史经验交易，但2005年时，以往的那些模式都变得不可预测了。
