Risk neutral valuation determines no arbitrage values for financial or real assets, including ones that are exposed to energy price risk. It is always uniquely associated with a hedging strategy if and only if markets are complete, which is the exception in theory and never the case in practice....

Merchant energy trading companies manage conversion assets to exploit price differences across time, space, and sources of energy in the face of energy futures term structure risk. Financial hedging of this risk is standard practice. Market incompleteness, such as limited futures liquidity,...