Forward Curve Builder: Build Better Price Forecasts with Aspect Price Manager

Aspect Price Manager (PM) is a forward curve management solution that supports the global price forecasting process. It aggregates forward curves and forecasts from all sources into a single database. It incorporates a knowledge-base of pricing methodologies and supports the end-to-end price forecasting process from traders entering differentials through to the delivery of prices exported to other systems.

Managing Forward Curves

Any company with positions in commodity markets needs to revalue existing positions on a daily basis for mark-to-market (MTM) accounting. And traders also want to see how curves are moving to measure the effectiveness of their forecasts. Trading companies rely on hundreds of forward curves that can come from multiple sources. Consolidating and analyzing volumes of historical and forward data to make confident trading decisions is difficult without a centralized system and process. Many companies use Excel spreadsheets to produce and manage forward curves. This practice does not allow for storing volumes of curves to chart against seasonal and historical trends and for comparing the effectiveness of historical forecasting versus actual prices. Also, as new regulations and tougher auditing standards come into play, a system is even more necessary.

AspectPM Online Demo

Integrated Approach to Price Management and Forward Curves Analysis

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AspectPM provides a framework for calculating, consolidating, archiving and re-distributing forward prices. With AspectPM, traders can create and consolidate forward curves to feed into AspectCTRM, or other trade and risk management systems, for MTM calculations and risk analysis. It also manipulates and consolidates data to provide other derived curves for use internally, and to stress test trading positions.

AspectPM provides a user friendly interface to enter forecasts across different time periods such as weeks, months or quarters. Users update price forecasts on a regular basis through uploads or manual entry. Each price curve can be seen in various reports with the grouping criteria based on price curve attributes, such as geographical region, material and price provider. AspectPM is web-based like all Aspect solutions, which means there’s no software to install or maintain. You simply log-on via a secure password.

AspectPM includes:

  • Quick, custom-fit solutions through configured workflows and modern user interface
  • Fast processing speeds for large trade volumes
  • Instant intraday and closing reports
  • Straight-through-processing (STP) eliminates double entry
  • Scripting tools for do-it-yourself customization without consultancy fees
  • Maximized inventory and transport opportunities

AspectPM Analysis Tools

Price Calculator

The Price Calculator performs a multitude of functions for analysis, like bringing price curves together and calculating new forward curves. It uses functions like curve splicing and interpolations to combine multiple curves and time periods.

Analysis Tool

Store every forecast along with years of historical prices to produce charts that show current and historical forecasts compared against actual prices.

Repository

The Repository is a central database that allows you to manually enter market prices and curves as well as automate uploads. All data can also easily be exported.

Alerts

Use the Alerts Tool to send automated messages that highlight price anomalies when prices on your watch list reach or exceed certain values. Set triggers that send automatic email reminders to personnel responsible for updating prices.

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AspectPM allows forward and historical curves to be defined. Historical curves can be mapped to forward curves for analysis and reporting purposes. Other features include:

  • Interpolation of prices with different time horizons such as prices in monthly and weekly buckets, and others in weekly or split horizons
  • Calculations of derived curves from other derived curves
  • Automatic volume-volume (eg. cpg to $/bbl) and volume-mass conversions between curves
  • An archive of historical forecasts for forecast accuracy analysis

 

Quickly & Accurately Analyze & Validate Large Volumes of Prices

AspectPM allows slicing-and-dicing of curves in hierarchies of data providers, locations and products. It also applies validation checking during data entry to ensure that manually entered prices are entered within sensible floors, ceilings, and deltas. A range of charting options is provided, including historical charts, forward curves mapped-to-historical equivalents and seasonal trend charts. Perhaps the most valuable feature of AspectPM is the powerful analysis you can perform with charts, which takes you beyond what you can do in spreadsheets. View scenarios using history, seasonality trends and forward pricing in the same chart. Once you load the contract history and curves you want to analyze, you simply point and click your way through the screens to change scenarios. Archive charts for future reference and historical comparisons for accuracy. This gives you an unprecedented repository of historical forecasting data. The chart above shows a 2011 forecast versus 2010 historical prices with 2010 historical forecast. This is a powerful tool in helping determine forecast accuracy.

Chart Seasonal Trends

The chart shows three years of pricing history compared against a 4-month forward curve. Easily change criteria by choosing a different time frame, location, curve, or data provider using drop down menus.

Chart the Accuracy of Forecasts

The chart shows a 2011 forecast versus 2010 historical prices with 2010 historical forecast. This is a powerful tool in helping determine forecast accuracy.

 

AspectPM Integrated Price Management

In 3 Easy Steps You Can:

  • Analyze Years Of Pricing History & Seasonality Trends Against Your Forecasts To Trade With Confidence
  • Build & Manage Hundreds Of Curves For Your P&L Calculations
  • Synchronize Your Desktop For Fast, Accurate, Convenient Analysis

Access Historical Prices to Create & Manage Forward Curves

AspectDSC is the decision support center for real-time and historical pricing, news and analytics tools. The Price Reader Tool allows you to draw from more than 20 years of historical pricing from Platts, NYMEX, ICE and FOREX with easy market symbol look-up and the ability to select nearby or specific contract information. You can also import historical and real-time futures pricing directly into AspectCTRM.

Upload History and Curves, and Also Build Forward Curves

Build and upload forward curves and save them for easy point-and-click charting analysis. Analyze seasonality trends for heating oil, gasoline, jet fuel and other product specifications in any region of the world. Chart your forward curves against years of historical trends, and against your forecasts to compare your level of accuracy and gain confidence in your forecasts. Change forecasts based on your analysis to enhance your trade performance.

Upload Forward Curves to Use in MTM P&L Calculations

Trading firms require and rely on P&L calculations to determine profit trends and potential risk within the business. AspectCTRM is recognized for its superior profit and loss management reporting capabilities. Risk managers combine these tools with the results of forecasting activities from AspectPM to make decisions based on critical forward and historical information. Because Aspect’s solutions are all built on the same platform, data is delivered at a high level in terms of speed and reliability that is crucial for meeting company performance objectives today.

Price Imports & Exports

Prices can be entered via a Web service interface, uploaded via spreadsheets/CVS files or manually entered. Prices can be exported the same way. Aspect Enterprise Solutions provides integration services to comply with each client’s needs.