“…The classical way goes by specifying a stochastic model for the spot price, and from this model derive the dynamics of forward prices based on no-arbitrage principles (see Lucia and Schwartz (2002), Cartea and Figueroa (2005), Roncoroni and Geman (2006), Benth, Kallsen, and Meyer-Brandis (2007), Garcia, Klüppelberg, and Müller (2011), Barndorff-Nielsen, Benth, and Veraart (2013), Weron and Zator (2014), and Benth, Klüppelberg, Müller, and Vos (2014)). The alternative is to follow the Heath-Jarrow-Morton approach and to specify the dynamics of the forward prices directly, as it has been done in Roncoroni and Guiotto (2001), , Weron and Borak (2008) and Kiesel, Schindlmayr, and Boerger (2009). All these studies model the forward prices using multifactor models driven by Brownian motion.…”