Many oil and gas producers and marketers employ hedging strategies to lock in prices at profitable levels. Future contracts and swaps can be effective tools in managing price and basis risk, creating price caps, price floors, and “no-cost collars” to manage price risk. Energy and commodities’ firms engaged in active trading are investing in more sophisticated ETRM solutions. Energy and commodities’ firms engaged in active trading are investing in more sophisticated ETRM solutions.

ETRM activities can be broadly classified as bidding, scheduling, Price forecasting, simulations, risk management, balancing, settlement, contract management. The interfaces amongst these offices make it impossible to get a clear picture of the corporation’s global exposure when departments work in isolation.