Commodities/Energy Risk Management Meeting Co-sponsored by CAIA Chicago

Tuesday, July 12, 2011

Members of three local Chicago professional organizations came together on June 30 for a presentation on “Commodities/Energy Risk Management.” The CAIA Chicago chapter joined with the Chicago Chapter of the Professional Risk Managers' International Association (PRMIA) and the Arditti Center for Risk Management at DePaul University, to co-sponsor the meeting held at the Chicago Mercantile Exchange.

Professor Ali Fatemi, Professor and Chairman of Department of Finance at DePaul University, served as moderator. Bill Gruzynski, head of the CAIA Chicago chapter, welcomed everyone. Hilary Till, Principal, Premia Capital Management (Chicago), presented on “Intelligent Commodity Investing.” Hillary, who is also a Research Associate at the EDHEC-Risk Institute and a Fellow at the Arditti Center for Risk Management, DePaul University, provided a historical view of commodities and discussed how this perspective can inform the current debate on speculation in the commodity markets. Nedia Miller, founder of MILLER CTA (NYC), presented on "Oil Price Risk and Hedging Strategies." She discussed various idiosyncratic risks, including the widening of the WTI-Brent spread due to storage constraints at WTI’s delivery point, a discussion that continued during the Q&A session. Jeff Mantel, Ph.D., CEO, Mantel Group of New Jersey, provided a lecture on "Impending US Regulations and their Effects." Jeff’s discussion on the implications of the Dodd-Frank rule included personal experiences that added humor to his presentation on what can be a dry topic: regulation.

The speakers, who have presented together at past events, engaged meeting participants with their knowledge and by referring to each other’s material.

After the Q&A session, Professor Fatemi astutely wrapped up the meeting by referring to one of Hilary’s slides that compared crude oil and fine wine fundamentals. He then invited participants to enjoy beverages and refreshments that were being offered in the adjoining conference room.

The meeting was well-attended and an appreciated break from the 90-degree temperatures during the day. Even more fortunate, the event ended before a wild hail storm that evening. This extreme weather volatility was a reminder to the visiting East Coast speakers of how Chicago came to be a foremost commodity risk-management center!

Hilary F. Till
Principal, Premia Capital Management (Chicago)

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