Hedging commodities, monetary policy and crude oil fluctuations

Hedging, Monetary Policy, and Oil Swings: Insights from FIS’s Latest Podcast

This week on Freight Up, we set out to give listeners practical insights into the world of risk management across the commodity spectrum, from freight to metals to crude oil.

If you’re looking to understand what’s really happening under the surface of today’s volatile markets, this episode features perspectives from professionals who operate right at that interface between price risk and real-world trade.

We started with Samuel Basi, founder of Perfectly Hedged Consultancy and a former Trafigura metals trader, for a deep dive into the realities of commodity hedging in liquid and illiquid markets.

From there, we heard from Carlo Boffa, a central bank watcher at Politico, on central bank decisions and how the evolving landscape of monetary policy is shaping the US dollar and, by extension, commodity prices.

We wrap up with Archie Smith, oil broker, who broke down the extreme pricing swings in the oil market driven by macro shocks and geopolitical headlines, highlighting what’s front of mind for market participants right now.

Some of the headline talking points this week include: the merits and pitfalls of one-to-one hedging in today’s market, with Sam exploring where hedging can reduce risk and where it might inadvertently add more.

We tackled the specific challenges faced by traders and companies in less liquid markets, including practical ways to quantify risk and work with imperfect hedges—or get creative in the over-the-counter space to find coverage.

Options came under the spotlight, especially with clients’ hesitancy to use them, and Sam gave practical context about why options sometimes get overlooked and when they can be a valuable part of a strategy.

Companies mentioned in this episode:

• FIS
• Perfectly Hedged Consultancy
• Trafigura
• Politico
• LME
• CME
• SGX
• ICE
• Citadel
• GMI