PROGRAM DETAILS

Introduction

International Oil Supply & Trade is a complex and dynamic industry that is crucial to the global economy. The supply and trade of crude oil and its derivative products are key drivers of economic growth and development across the world. This comprehensive and advanced-level program is designed to provide participants with an in-depth understanding of the global oil supply and trade market, its complexities, and the key factors that influence it.

The program will cover a wide range of topics, including the global oil market structure, the role of oil producers and consumers, trade patterns and flows, price dynamics, and geopolitical factors influencing the industry. The program will also explore the challenges faced by the industry, including supply disruptions, volatility, and uncertainty.

By the end of the program, participants will have gained a deep understanding of the global oil supply and trade market, its complexities, and the key factors that influence it. They will be equipped with the necessary knowledge and tools to analyze and assess the market, make informed decisions, and manage risks effectively. This program is essential for professionals who are seeking to advance their careers in the oil and gas industry and make a valuable contribution to their organizations.

Learning Objectives

By the end of the program, participants will be equipped with the knowledge and skills required to

• Comprehend the Brent Market and its influence on international pricing
• Position management with hedging tools
• Supply and demand: fundamentals and implications
• The structure of purchase/sales contracts including exposures and transaction costs
• Crude evaluation and selection
• Physical markets, pricing & price exposure
• Price risk management
• Developing successful trading strategies
• Oil trading and jargon
• Oil Refining
• The use of trading instruments to capture the market
• Use of Freight Forwards to manage freight risk
• Working the arbitrage
• Price Assessment & Market Reporting
• Trading structured positions and live markets

Who Should Attend

The program is designed for professionals working in the oil and gas industry, including traders, analysts, risk managers, government regulators, and industry consultants, who are seeking to enhance their knowledge and understanding of the global oil supply and trade market.

 Training Methodology

 Participants will be guided by expert trainers who have extensive practical experience in the oil and gas industry, and who will share their knowledge, expertise, and best practices to ensure participants gain a comprehensive understanding of the market. The program will use a combination of lectures, case studies, group discussions, and practical simulations to provide participants with a hands-on experience of the global oil market.

 Program Content

 Day 1:
Crude Oil and Product Markets

• Why trade?
• Supply/demand
• How the markets work

 Crude evaluation & selection

• Crude classification and assay
• Gross product worth
• Worldscale (freight costs)
• Net margin and crude selection

Pricing

• Price reporting
• Pricing mechanisms
• Price risk
• Pricing exposure

Day 2:
Demand & Supply

• Fundamentals & Implications
• Current reserves & production
• Oil supply & demand and trade implications •

Shipping and Freight

• Freight exposure and freight forwards

Contracts

• Issues and problems

 Price Risk and Risk Management

• Summary of markets (Physical, Forwards, Futures, Swaps, Options)
• Understanding long and short positions
• Introduction to hedging tools
• Basis risk

 Day 3

Hedging Instruments

• Evolution of the market
• Crude oil forward markets
• Crude forward contracts
• Spread trading
• Review of futures contracts & terminology 17 Role of ICE/Nymex
• Hedging example using futures
• Basis risk and forward curve

Product Trading

• Light and Middle Distillate Trading
• Fuel Oil Trading
• Developing successful trading strategies
• World product markets and pricing
• Locations, time and quality arbitrages
• Futures – features of the key futures markets
• Delivery

Crude Trading

• Developing successful trading strategies
• Negotiating term deals
• Other risks and exposures
• Arbitrage price risk management
• Payment mechanisms, letters of credit
• Counterparty selection

 Day 4
Oil Refining

• Crude supply, refineries & finished product 21 Refiners change product mix
• Supply, demand & alternative fuels
• Emissions & product quality
• Refinery margins & investment
• Product Trade Flows & Transport
• Differences between products & crude 26 The main product markets
• Product price drivers
• Product price differentials
• Refining balance
• Fundamentals of the various product markets 31 Power market
• Bunker market
• Atmospheric residue market
• Importance of refining margins
• Freight
• Arbitrage & trade
• Role of traders/blenders

Introduction to Advanced Instruments

• The EFP
• Swaps & Options
• Spreads and basis trading

 Day 5
Trading: options and risk management strategies

• Options: terminology and examples 39 Options pricing
• Risk management exercise

 BFO market & CFD’s

• The Brent forward contract
• Brent lifting programme
• Linking of the 21 day BFO & dated Brent markets 44 Contracts for difference/ Brent CFD market

 Market reporting and price assessment

• What is Platts?
• Market needs
• Scope of crude and product reporting
• Price assessments and confirmation

 Case Studies and Exercises Include:

• Price exposure
• Arbitrage
• Basis risk
• Negotiating a deal
• Freight Hedging
• Option valuation
• Contract Risks
• Managing ongoing positions
• Trading the live market