Power, Gas, Oil & LNG Trading
Trading lifecycle, scheduling, logistics, valuation, risk and settlement.
Energy Trading & Commodities
Commodity Risk, Controls & Surveillance
Limits, P&L and surveillance have to describe the same book the desk is trading.
Overview
Commodity risk spans market, credit, volumetric and delivery risk, and the controls around a trading floor have to work at trading speed: limits that reflect the real book including the physical position, P&L the desk accepts, and surveillance across the wholesale markets actually traded. REMIT II extends surveillance and reporting expectations across EU energy markets, and counterparties examine credit and controls as part of trading access.
We build the framework and the evidence together: risk measurement sized to the book, limit structures the risk committee can govern, daily P&L and explain produced from the systems, and surveillance calibrated to the markets traded, with a documented review behind every alert.
The surveillance discipline was built in financial markets under MAR and MiFID II, including trading-controls work delivered under an enforceable undertaking, and is applied to the energy crossover. Delivery runs through our Market, Credit & Counterparty Risk and Trade Surveillance & Market Abuse practices.
What we do
Risk measurement that includes the physical position: shape and volume risk on PPAs and demand books, storage and transport optionality, and stress scenarios drawn from the markets traded. The measures are ones the desk recognises as its own book.
Counterparty exposure across physical and financial deals, potential future exposure, margining and collateral, prepayment and open-account risk. Credit decisions run on current data, and concentrations are visible at portfolio level and reviewed on a set rhythm.
Limit structures matched to how the book is actually run — desk, strategy, tenor, delivery point — with defined escalation when a limit is used or breached, and a governance record the risk committee can rely on.
Daily P&L with explain that separates price, volume, new deals and adjustments, independent price verification on the curves that matter, and month-end sign-off produced from the systems. The desk and risk work from one set of numbers.
Surveillance across the wholesale energy and commodity markets traded, calibrated to your order flow: abuse scenarios defined, alerts tuned so the case queue stays workable, and a documented review behind every alert. Coverage is mapped to REMIT II and MAR obligations.
Desk mandates, dealing controls and the first-line control framework around the trading floor, with evidence recorded as each control runs. The framework is sized to the business, and each control is tested in operation before it is relied on.
What to expect
We start by reading the book and the current framework side by side: positions, limits, the P&L process and the alerts actually generated. Gaps are ranked by exposure, and the work proceeds framework and evidence together — each measure, limit and surveillance scenario goes live with its calibration and review documented. A Capmark principal leads throughout, working with the CRO, head of compliance and the desk heads.
The framework is sized to the book — a two-desk trading arm and a global merchant need different machinery.
01
Assess
Establish the current state, the constraints, the risks and the value at stake.
02
Define
Shape the target model and the business case with the executives who own the outcome.
03
Mobilise
Stand up the team, the plan and the governance around the outcome.
04
Implement
Design, build and test the change, with the business alongside.
05
Sustain
Cutover, hypercare and handover, so the business runs it under its own control.
The same five stages on every engagement, led by senior practitioners end to end. How we work
Insights
Related thinking.
Get in touch
Talk to a Partner about Commodity Risk, Controls & Surveillance.
Tell us what needs to change and where the pressure or risk is showing.