Add energy article: Hedging Strategy Overview

Adds article describing hedging strategies and policy guidelines to manage fuel price risk.

Author: najsefoster1

docs/packs/energy/articles/hedging-strategy-overview.md

@@ -0,0 +1,35 @@
+---
+title: "Hedging Strategy Overview"
+domain: energy
+subdomain: risk-management
+audience: internal
+format: article
+status: draft
+author: Risk Management Team
+last_updated: 2025-10-18
+pii_risk: low
+---
+
+# Hedging Strategy Overview
+
+## Purpose
+Outline the objectives and instruments used in hedging fuel price risk for downstream operations to protect margins against volatility.
+
+## Hedging Instruments
+
+- **Futures contracts**: Standardized agreements to buy or sell fuel at a future date and price. Useful for locking in prices and reducing exposure.
+- **Swaps**: Agreements to exchange floating price exposure for fixed price payments. Ideal for hedging basis differentials.
+- **Options**: Contracts giving the right but not the obligation to buy or sell at a preset price. Provide asymmetric protection with premium costs.
+- **Physical storage**: Holding inventory when forward curves are backwardated can be an effective hedge, but requires capacity and capital.
+
+## Policy Guidelines
+
+1. Determine hedge coverage targets (e.g., percentage of expected volume) based on risk appetite and market outlook.
+2. Align hedging tenor with anticipated exposure duration and inventory cycles.
+3. Adhere to credit limits and counterparty exposure limits; use approved brokers only.
+4. Document hedge rationale, trade details, and approvals for audit compliance.
+5. Monitor hedge effectiveness and adjust positions as market conditions evolve.
+
+## Governance
+
+Hedging activities should follow a documented policy approved by leadership. The risk management team collaborates with finance, supply, and trading to evaluate strategies and ensure compliance with regulations and internal controls.