Energy merchant markets are predicted to grow 30% between 2002 and 2006, with oil and natural gas majors and financial service firms dominating the market, according to a report by Energy Insights.

The study predicts that there will be even more participation by financial institutions between 2008 and 2010 while asset-based traders, particularly in the power sector, reengage.

According to Catch the Wave – Energy trading and risk management in 2005 and beyond, trading in power and gas will continue to recover from the post-Enron decline.

Jill Feblowitz, a director at Energy Insights, says: “Elevated prices and increased instability in energy commodity are driving increased activity in energy trading and risk management.”