Asset-Backed Commodity Trading

What all companies in the hydrocarbon value chain have in common is that their fortunes often rise and fall as a direct result of forces that are beyond their control. With so much volatility related to the price of crude oil, manufacturing excellence alone is no longer enough to ensure financial success for companies where commodities are traded like in the hydrocarbon value chain. Long term commitments become more and more costly to hedge in the absence of liquidity.

The Asset-Backed Trading is a style of commodity trading used to seek to exploit market volatility in order to monetise operational asset flexibility. It views physical assets as portfolios of traded instruments.

Today, companies must link their manufacturing excellence to market and financial intelligence to remain competitive. It poses a challenge on the business process as well as effecting the IT landscape; a move is necessary from a technology-centric focused on certain processes to a technology that is embedded into all processes and equally weighted toward financial instruments. A well-defined, streamlined, synchronised and documented process is the base to provide the necessary information, to fulfil regulatory tasks and compliance requirements such as IFRS and SOX.

 

How BearingPoint brings value

When implemented properly, asset-backed commodity trading can help companies:

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  • Natalia Krasnoperova

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