Hedge funds drive activity

Volatile energy markets gave corporates and funds plenty to think about in 2004 – and while banks still dominate Risk’s energy rankings, energy companies have taken over for the first time in sectors such as US natural gas. By James Ockenden, editor of Energy Risk magazine

Over-the-counter energy trading volumes bounced back during the past year to levels last witnessed before the 2002 collapse of Enron – an event that sparked the exit of a number of merchant traders from the business. Volumes were up, funds moved in,and investors wanted to diversify their portfolios using oil or energy index products. Corporates, meanwhile, realised they needed to manage the risk of a barrel of oil potentially nearly doubling in price overnight.

All this has resulted in energy