Energy Trading Hedge Funds

Energy Trading Hedge Funds

Energy Trading Hedge Funds Hope for Rise in Demand

Hedge-fund manager Energy Capital Management BV's CEO predicts that the sagging energy demand and drop in German electricity prices may be over.  CEO Marcel Melis optimistically forecasted “The forward prices are at lows, the spot prices are at lows.  One thing is for sure -- energy consumption will not decrease anymore.”  European demand for energy commodities from power and oil have fallen dramatically during the recession.  Mr. Melis is hoping to see a reverse in the German energy market which has had particularly low demand lately leading prices to slide.  Nearly 60 percent of Energy Capital Management’s MMT Energy Fund is in German power.

“I don’t believe it’s a good moment to be short anymore” in German power, Melis said.
The Paris-based International Energy Agency forecasts oil demand will pick up in 2010, while the drop in European power demand may have reached a floor, Lars Josefsson, head of the Nordic region’s biggest utility, Vattenfall AB, said in July. German power use slid 6 percent to 262 terawatt hours in the first half, according to data from utility group BDEW.

Melis, 41, worked as an energy trader at BP Plc, Statkraft SF, Reliant Energy Inc. and Delta Energy NV before starting the MMT Energy Fund in October 2006. It has returned 0.2 percent this year through August, according to data compiled by Bloomberg. The fund also trades in other European power markets, natural gas, coal and emissions.  Source

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