The high pace at which many of the world's energy markets have gradually been opened tocompetition have generated a significant amount of new financial activity. Both academicians and practitioners alike recently started to develop the tools of energy derivatives pricing/hedging as a...

It is well known that stochastic volatility is an essential feature of commodity spot prices. By using methods of singular perturbation theory, we obtain approximate but explicit closed-form pricing equations for forward contracts and options on single- and two-name forward prices. The expansion...