Trading strategies - Walking a fine line

A worrying trend is emerging in the UK corporate world, with many companies adopting extremely risky strategies in a bid to reduce their exposure to energy price volatility, says Utilyx chief executive Chris Bowden

The energy markets have entered uncharted territory over the past few months, with oil, coal, and UK gas and power at or near all-time highs. Oil has risen 150%, from $60 per barrel in early 2007 to almost $150/bbl today, while coal has almost doubled in price over the same period to $220 per tonne. This has lead to a significant increase in the price of electricity, both in mainland Europe and the UK.

The problem for many businesses is not necessarily that energy prices have increased so much as