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Use of weather risk derivatives seen growing. (News).(Brief Article)

Energy User News

| September 01, 2002 | COPYRIGHT 2002 BNP Media. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

HAUPPAUGE, NY--R.J. Rudden Associates, Inc. (Rudden) announced that its research led it to conclude that utilization of financial weather risk management instruments in the U.S. energy and public utility sectors are at an all time high. "Our research demonstrates that despite a broad scale collapse of the energy merchant sector that led in the development of weather-related risk hedging financial instruments in the United States, the demand for the products has increased. We are happy to report that the strength and liquidity of weather-related instruments is very strong," states Donald L. Sytsma, a co-author of the study and a Rudden vice president located in Houston.

The study states that recent multi-year trends towards warmer than "normal" weather have increased awareness to "volumetric risk," and ...

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