Modeling, Valuation and Risk Management of Assets and Derivatives in Energy and Shipping

The energy and shipping markets operate in an environment exposed to a variety of risks responsible for the high volatility of the prices of oil, natural gas, electricity and freight rates. The need to control this price volatility has prompted the development of valuation and risk management methods for energy assets and their derivatives analogous to those widely used in the fixed income, equity and foreign exchange markets. This paper reviews recent developments in this field emphasizing quantitative methods and their application in energy and shipping.