PROGRAM DETAILS

Introduction

This program is created to give delegates an introduction and understanding of crude trading in a supportive learning environment which will provide clarity, when navigating through the relatively complex concept of hedging. This approach will effectively prepare delegates to analyse and mitigate risk in the crude market, when tasked with responding to ‘real world’ situations. Delegates will learn how to negotiate and price deals, evaluate profitability, liaise with third party maritime stakeholders and analyze the contractual aspects of trading.

Delegates will learn through active participation and practical case studies, making decisions as part of a crude oil and refined product trading team, charged with maximizing profits through an understanding of the economics of trading and the management of intrinsic price risks.

As part of a trading team, delegates will identify and manage the price risks of their trading book. They will trade the full range of derivative markets, most of them in real-time, using prevailing market prices from relevant agencies including, Platts and Argus. As market conditions change, delegates will compare the performance of different instruments and learn to select the appropriate one to meet their objectives.

Furthermore, delegates will build a sound understanding of the markets, gain practical experience in selecting and using a variety of risk management instruments, and learn strategies for their use in hedging and price management. This course will also cover the value of optionality, management control, and risk measures.

Learning Objectives

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

• Build a comprehensive understanding of the various trading techniques and methods.
• Recognize market risk and take action to manage such risk effectively.
• Scrutinize the market performance oil and gas investments and their expected future performance.
• Employ a logical process with practical technical analysis to lessen risk factors in energy trading.
• Influence energy derivatives to hedge prices and risk exposure.
• Successfully trade products in the oil and gas market.

 Who Should Attend

This course is designed for all professionals who wish to enhance their knowledge in crude trading market; including commodity traders, trading managers, portfolio and planning managers, analysts and risk consultants.

 Training Methodology

This practical and results-oriented program incorporates short inspiring facilitated discussions with structured lessons from the learning manual. There is a captivating PowerPoint slide presentation with stories to enhance learning, a variety of pertinent video sequences, ongoing learning reinforcement and discussions with action planning. Ample time will be given for questions and answers.

Program Content

 Day 1:

Introductory Material

• Introduction to trading and markets
• Price reporting
• Pricing mechanisms

Crude Oil Trading

• International pricing of crude oils
• Crude oil trading
• Dated Brent and Brent Markets

Products Trading

• Mechanics of trading products
• Oil Brokering
• Costings
• Valuing product quality

Day 2:

Contracts and Trading

• Negotiating a deal
• Writing a contract
• Calculating the profitability of deals
• Contango and backwardation

 Processing

• Introduction to processing deals

Chartering and Freight

• Calculating freight costs using worldscale
• Chartering a ship

Day 3:

Performance and Credit

• Client / Counterpart risk
• Payments and credit risk

Risk Identification

• Identifying risks in a corporate position
• Quantifying exposure
• Contango and backwardation
• Liquidity and basis risk

Risk Management Instruments and Markets

• Futures & Forward markets
• Dated Brent and Brent Markets
• CFDS / DFLS
• Swaps and OTC markets Role of the market maker
• Comparison of instruments

Day 4:

Options

• Exchange and OTC Options
• Options Strategies
• Tailored Swaps and Embedded Options

Optionality

• Identifying and valuing optionality in the oil markets

 Price Management

• Exchange for physical
• Trigger Pricing

Day 5:

Risk Management Techniques

• Hedging with futures, swaps, and forwards
• Hedging with options
• Spread trading
• Basis risk
• Structured instruments
• Comparing hedging strategies
• Hedging in practice

Trading Control

• Clearing & Exchanges
• Value at Risk
• Management Control