  We describe a model for evolving commodity forward prices that incorporates
three important dynamics which appear in many commodity markets: mean reversion
in spot prices and the resulting Samuelson effect on volatility term structure,
decorrelation of moves in different points on the forward curve, and implied
volatility skew and smile.
  This model is a "forward curve model" - it describes the stochastic evolution
of forward prices - rather than a "spot model" that models the evolution of the
spot commodity price. Two Brownian motions drive moves across the forward
curve, with a third Heston-like stochastic volatility process scaling
instantaneous volatilities of all forward prices.
  In addition to an efficient numerical scheme for calculating European vanilla
and early-exercise option prices, we describe an algorithm for Monte
Carlo-based pricing of more generic derivative payoffs which involves an
efficient approximation for the risk neutral drift that avoids having to
simulate drifts for every forward settlement date required for pricing.
