Crude Oil Trading and Risk Management

Crude Oil Trading and Risk Management

by | Mar 30, 2023 | HP Slider, TC Crude Oil, Training Courses

Crude Oil Trading and Risk Management

Course Code: CO-TRM

Course Overview

This 4-day course covers all aspects of crude oil trading and marketing, including how refiners value
crude oil, the qualities of crude oil, yield models and margin calculations, and how physical and
futures trading of crude oil are connected.

Scope
This 4-Day programme provides a detailed knowledge of the trading of crude oil and how the value of the refined petroleum products derived from crude oil affect the values of the feedstock.
The course follows a logical order looking at the fundamentals of crude oil supply, the structure of a physical crude oil transaction, how refiners make a valuation of the different grades competing in the market, how the deal parameters such as quality, timing, location, quantity and logistics affect the physical transaction, the derivative instruments available for trading crude oil on a speculative basis and for hedging; and perhaps most importantly, how the value of physical crude oil and the futures, options and swaps that are traded as derivatives interact.

The drivers of crude oil prices in relation to refined products prices are explained, as well as the
changing drivers of market volatility, and how these are relevant to trading and risk management.
The basic structures of commodity trading are systematically introduced, including physical,
forwards, futures, options and swap markets. The course explains the role of trading in ensuring the efficient flow of goods between producers and end-users; the structure of oil and their pricing are explained, and how the main benchmarks provided by agencies such as Petroleum Argus are used.

The programme provides hand-on exercises that allow delegates to confidently use volume, mass
and energy conversion factors; to understand the quality specifications of different types of crude oil and their suitability for the various end-users; as well as basic commercial calculations such as crack spreads, Gross Product Worth, margins, and differentials. The course simplifies and explains the jargon and technical terms used in the oil market. This is a highly interactive course which uses hands-on exercises and visual aids to help delegates retain what they learn.

Delivery
The course is delivered over four days and is divided into 8 modules. Each module takes around 1.5 hours to complete, so around 3 hours per day of tuition and exercises (2 modules per day). Each day has a clear focus covering first, crude oil pricing and how quality specifications affect the price; crude oil contracts and the logistics of trading crude oil, including transportation; how the physical and derivatives markets interact; crude oil valuation from a refiner’s perspective; risk management and hedging; and how to lock in margins through time and location arbitrage.

Objectives
• Gain broad perspective of global oil business from crude production to oil products consumption
• Understand how physical crude oil contracts are structured
• Master the calculations that you need to understand GPW, GRM, crack spreads; oil transportation
costs; as well as arbitrage calculations
• Understand the trading and pricing structures for crude oil and master the calculations you need to negotiate prices relative to benchmarks within contractual structures.
• Understand the system of crude oil benchmarks and differentials, including how the Dated Brent,
Oman/Dubai and WTI/LLS prices are calculated.
• Be aware of risk management and the basic structures for hedging crude oil sales and purchases,
and for locking in a trading margin.
• Confidently discuss the technical terms, concepts and buzzwords with your peers and clients

Topics Covered Include
• Crude oil chemistry and qualities
• How a refiner views crude oils
• Regional grades
• Benchmark-related pricing
• Crude oil transportation
• The five dimensions of a crude deal
• Writing a crude oil contract
• Hedging and price risk management
• Trading logistics and demurrage
• Interactive exercises and simulation

Who should attend?
Crude oil marketers, traders; refining industry planners; banking, finance execs; lawyers,
accountants; oil company graduate trainees; power companies with exposure to oil prices; refined
product end-users. Banks with a presence in the commodities markets; swaps sales and marketing
staff; regulatory and taxation authorities; oil refiners; National Oil Companies; independent
exploration companies; oil and commodities traders; business development staff at futures
exchanges; fund managers; private equity executives.

Course Director
Peter Stewart is a highly experienced analyst in the oil and gas markets, and he written extensively
on the energy transition. Before setting up Resource Economist, he worked in senior positions at
leading energy consulting and business information companies including S & P Global Platts, Interfax and KBC Energy Economics. He a director of the British Institute of Energy Economics and a member of the BIEE Council. He has co-edited a number of editions of the OIES Oxford Energy Forum and has worked as an associate /advisor with a number of consulting firms. Peter is an expert in the trading of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a frequent speaker on energy matters at industry conferences and in the media, and has written a number of books with a business focus. He began his career as a journalist having graduated in English and Oriental Studies from Emmanuel College, Cambridge

For course details and PDF please click on the link below:

Crude Oil Trading and Risk Management

Refined Products Pricing and Risk Management

Refined Products Pricing and Risk Management

by | Mar 21, 2023 | HP Slider, TC Refined Products, Training Courses

Course Overview

This 3-day course provides a comprehensive overview of Refined Products pricing and risk management strategies, including LPG, Gasoline, Naphtha, Kerosene, Diesel/Gasoil, Marine Fuels and Intermediate and Residual Products. Each day has a clear focus covering first, the Refined Products risk landscape from the refinery to the consumer; market structure and benchmark pricing methodologies published by S&P Global Commodities/Platts and Argus for price assessments of underlying commodity and derivatives; the availability of hedging instruments; risk management strategies and quantitative tools such as VaR used for risk evaluation, mitigation, monitoring and reporting.

Learning Objectives

  • Understand pricing methodology for each of the main refined oil products
  • Explain how Price Reporting Agencies make assessments in Europe, Asia, Middle East and Americas
  • Understand availability of hedging instruments including swaps, futures and options
  • Learn the basics of putting on a hedge and locking-in a trading margin
  • Know how to develop a risk management strategy based on cash-flow at risk
  • Master calculations that you need to understand volatility and correlation
  • Learn how to implement a risk control strategy
  • Confidently discuss the technical terms, concepts and buzzwords with your peers and clients

Course Modules

  • LPG Pricing and Market Struture
  • Transportation Fuels Pricing and Market Structure
  • Residuals and Intermediates Pricing and Market Structure
  • The Refined Products Derivatives Markets
  • Hedging and Speculation
  • Locking in an Arbitrage
  • Risk management strategy and hedge ratios
  • Volatility and correlation measures
  • Risk Measurement, Monitoring and Reporting

Who should attend?

Refined products marketers, traders; refining industry planners; banking, finance execs; lawyers, accountants; oil company graduate trainees; industrial companies with exposure to oil prices; refined product end-users. Banks with a presence in the commodities markets; swaps sales and marketing staff; regulatory and taxation authorities; oil refiners; National Oil Companies; oil and commodities traders; business development staff at futures exchanges; fund managers; private equity executives.

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He was a director of the British Institute of Energy Economics (2013-2021) and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of large consulting firms including IPA Advisory Ltd and KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on oil trading. Peter has many years experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach and is accredited with the European Mentoring and Coaching Council. Peter has written a number of books with a business focus. He graduated in English and Oriental Studies from Emmanuel College, Cambridge in 1982.

Detailed Scope

This three-day programme provides a detailed knowledge of refined products pricing and risk management.

The basic structures of commodity trading are systematically explained, including physical, forwards, futures, options and swap markets. The course covers physical and derivatives pricing for LPG, gasoline, naphtha, kerosene, gasoil/diesel, marine fuels, and residual and intermediate products.

The course explains how the refined products benchmarks provided by Price Reporting Agencies such as Standard & Poors/Platts and Petroleum Argus are used in settlement of physical and derivative transactions. The drivers of refined product prices are explained, as well as the changing drivers of market volatility for each product group, and how these are relevant to risk management.

 This course provides a comprehensive overview of refined products risk management, including price formation in the underlying markets; price volatility and modelling energy prices; quantitative tools for risk analysis including volatility and correlation measures; hedging strategies and risk-offsetting; liquidity risk management; modelling portfolio risk; Value-at-Risk (VaR) and other risk measures; and market risk reporting. The interaction between the value of the physical refined products, price assessments and instruments that are traded as derivatives is explained clearly.

Course Delivery

The course is delivered over three days and is divided into 9 modules. Each module takes around 1.5 hours to complete, so around 4.5 hours per day of tuition and exercises (3 modules per day). The course can be delivered online or in person at the client’s office. The style of tuition is informal, friendly and highly interactive, with regular recaps of key course material provided. Delegates are encouraged to ask questions at the end of each module. Exercises and questionnaires are provided for overnight scrutiny to allow delegates to consolidate the intensive course materials provided.

For full details and a list of course modules please click on the link below:

Refined Products RM – course outline

 

 

 

LPG Pricing, Trading and Valuation

LPG Pricing, Trading and Valuation

by | Mar 21, 2023 | HP Slider, TC Gases and LNG, TC Refined Products, Training Courses

Course: LPG Pricing, Trading and Valuation

Course Overview

This 4-day course provides a comprehensive overview of the LPG market, trading, pricing, valuation and the opportunities for risk management. Each day has a clear focus covering:

  • the LPG value chain and sectoral use of LPG in the petrochemical sector, heating and residential use of LPG, and LPG in transport and industry;
  • the pricing methodologies and contractual structures used in LPG trading; including Contract Prices and how Argus benchmarks are used in settlements of spot and term contracts, and derivatives;
  • the trading and transportation of LPG by region (Middle East/Asia, the Americas and Europe/Africa),
  • the impact of the Energy Transition on LPG use, and how risk management and hedging can be used to mitigate price volatility.

Each of the four days is sub-divided logically into manageable sub-topics to facilitate retention of the knowledge imparted during the course.

Learning Objectives

  • Understand price formation in the underlying markets that drive the value of LPG
  • Know the pricing structures used in each of the main LPG trading regions
  • Understand the use of Contract prices and PRA benchmarks in the pricing of LPG
  • Quantify the sectoral use of LPG in each geographical region, and in the Middle East
  • Know regional trading patterns and how LPG is transported in and between regions
  • Learn some tools for valuation of LPG when specific PRA prices are unavailable
  • Understand how the availability of competing petrochemical feedstocks affects LPG prices
  • Do basic calculations of LPG value against naphtha, crude oil and heating fuels
  • Know how to model LPG prices and hedge during periods of market volatility
  • Have an opinion about how the Energy Transition will affect LPG demand and prices

Course Modules (12 modules over 4 days)

LPG Value Chain and Sectoral Use

  • LPG Value Chain and Market Structure
  • Introduction to LPG Regional markets
  • Sectoral Use of LPG by Region

LPG Pricing and Commercial Structures

  • LPG Pricing structures: Contract prices, Assessments
  • LPG Contractual Structures: Spot and Term
  • LPG Transportation and Freight

 

LPG Regional Trading and Pricing

  • Middle East and Asian LPG Markets
  • LPG in the Americas and the Shale Revolution
  • LPG Market in Europe, Africa and Turkey

LPG Opportunities and Competitors

  • LPG Price Exposure and Risk Management
  • Emerging Trends in Global LPG Markets
  • LPG and the Energy Transition

Who should attend?

LPG traders and trading analysts; petrochemical feedstock analysts; treasury and financial control managers with IOCs and NOCs; regulators and taxation bodies; industry analysts with exposure to LPG prices; energy portfolio strategists; industry planners; banking, finance executives; lawyers, accountants and other advisors; utility and end-user groups exposed to the price of LPG.

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He was a director of the British Institute of Energy Economics (2013-2021) and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of large consulting firms including IPA Advisory Ltd and KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on oil trading. Peter has many years experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach and is accredited with the European Mentoring and Coaching Council. Peter has written a number of books with a business focus. He graduated in English and Oriental Studies from Emmanuel College, Cambridge in 1982.

Detailed Scope

This four-day programme provides a detailed knowledge of the LPG value chain and the associated risk landscape.

 The LPG value chain from field or refinery to the final consumer is fully explained. The course provides in-depth analysis on the sectoral use of LPG in each of the main geographical regions.

 The basic commercial structures of LPG trading are outlined systematically, including fixed price and floating price trading and contract prices. The course explains how benchmarks provided by Price Reporting Agencies such as Argus Media are used in the settlement of physical and derivative transactions.

 The course provides a comprehensive overview of LPG trading by region and by sector, focussed on Middle East and Asia, the Americas, and Europe and Africa. Inter-regional flows between these three main regions are explained.

The course ends with a broad discussion of the risks and opportunities in LPG trading, focussed on how the Energy Transition will affect the use of LPG and regional trade flows, and how hedging can be used to mitigate price exposure.

The course simplifies and explains the jargon and technical terms used in the LPG market. This is a highly interactive course which uses hands-on exercises and visual aids to help delegates retain what they learn.

Course Delivery

The course is delivered over four days and is divided into 12 modules. Each module takes around 1.5 hours to complete, so around 4.5 hours per day of tuition and exercises (3 modules per day).

Exercises and questionnaires are provided in the classroom and for overnight scrutiny to allow delegates to consolidate the intensive course materials provided. Delegates are fully supported by the course instructor to successfully complete the various exercises and assignments.

The course can be delivered online or in person at the client’s office. The style of tuition is informal, friendly and highly interactive, with regular recaps of key course material provided. Delegates are encouraged to ask questions at the end of each module.

Outline_LPG Pricing, Trading and Valuation

LNG Trading and Risk Management

LNG Trading and Risk Management

by | Mar 21, 2023 | HP Slider, TC Gases and LNG, Training Courses

 

LNG Trading and Risk Management – course outline

This online course provides a comprehensive overview of the LNG trading sector and LNG trading and risk management strategies.

Scope

This course provides a comprehensive overview of the LNG trading sector, including mass, volume and energy conversions; the LNG value train from liquefaction to regasification; transport logistics; the structure of LNG contracts; the concept of oil parity and the pricing of LNG; hub-related pricing; risk management models; the economics of LNG portfolio trading; price drivers and the impact of interfuel competition; and the role of sustainable LNG in the energy transition. Peter’s aim as a trainer is not just to present the course materials but to do so in a relaxed and enjoyable way that allows delegates to absorb the content of the lessons and to make the knowledge their own.

Delivery

The course is delivered over four days and is divided into 8 modules. Each module takes around 1.5 hours to complete, so around 3 hours per day of tuition and exercises (2 modules per day). Each day has a clear focus covering first, the LNG value chain; the pricing methodologies and market structure; trading and risk management; and finally emerging trends for the LNG market outlook. Each of the four days is sub-divided logically into sub-topics to facilitate retention of the knowledge imparted during the course.

Objectives

  • Gain broad perspective of global LNG business from liquefaction to regas
  • Understand how LNG long-term and short-term contracts are structured
  • Master the calculations that you need to understand mass, volume and energy conversions relevant to LNG
  • Understand the trading and pricing structures for LNG including oil parity, slope and coefficient, and hub-related pricing
  • Be confident to negotiate prices relative to established benchmarks within contractual structures.
  • Understand the concept of LNG portfolio management, optimization and risk
  • Be aware of risk management and the basic structures for hedging LNG sales and purchases, and for locking in a trading margin.
  • Confidently discuss the technical terms, concepts and buzzwords with your peers and clients

 

 

Topics Covered

  • What are Gas and LNG?
  • Basic calculations of mass/volume/energy
  • The LNG Value Chain: from Liquefaction to Receiving Terminals
  • LNG transportation logistics
  • Drivers of gas and LNG prices
  • LNG Contracts: Long Term, Short Term, spot
  • LNG Pricing: Oil Indexed and Hub-related
  • Slope and coefficient, S curves
  • LNG market participants and portfolio players
  • Basics of Hedging
  • Hedge selection and instruments
  • Portfolio risk
  • Economics of LNG and Interfuel Competition
  • Sustainable LNG and the Energy Transition

 

Who should attend?

Natural gas and LNG marketers, traders and trading analysts; energy portfolio strategists; industry planners; banking, finance execs; lawyers, accountants and other advisors; gas and LNG graduate trainees with IOCs and NOCs; power companies with exposure to gas prices; regasification terminal operators; gas end-users.

 

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He is a director of the British Institute of Energy Economics and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of consulting firms including IPA Advisory Ltd and he was chief economist at KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on the short-term oil and gas outlook and on oil trading. Peter has many years experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach. He has a relaxed and interactive tuition style, and seeks to maximize the learning experience of delegates through the use of coaching techniques.

For Course Details and PDF listing course modules please click on the link below:

LNG Risk Management – course outline

 

Crude Oil Pricing and Risk Management

Crude Oil Pricing and Risk Management

by | Mar 21, 2023 | HP Slider, TC Crude Oil, Training Courses

Crude Oil Trading and Risk Management

Course Overview

This 3-day course provides a comprehensive overview of Crude Oil pricing and risk management strategies. Each day has a clear focus covering first, the Crude Oil volatility and the value chain risk landscape from oilfield to refinery; benchmark pricing methodologies (Brent, Oman/Dubai and WTI), crude oil differentials and market structure; hedging of benchmark and differentials; and risk management monitoring and strategy, including VaR and other quantitative tools for risk evaluation, mitigation, monitoring and reporting. Each of the three days is sub-divided logically into manageable sub-topics to facilitate retention of the knowledge imparted during the course.

Learning Objectives

  • Understand the system of crude oil benchmark pricing and differentials
  • Understand how PRAs calculate Dated Brent, Oman/Dubai and WTI assessments
  • Know the basic structures for hedging crude oil sales and purchases
  • Become familiar with crude oil futures, options and swaps and their use in hedging
  • Master the calculations you need to manage risk relative to benchmarks
  • Understand how to lock in a trading margin using derivatives
  • Track GPW, GRM, crack spreads and transportation costs
  • Confidently discuss the technical terms, concepts and buzzwords with your peers and clients

 

Course Modules

  • Crude oil benchmarks and their use in physical and derivatives pricing
  • How crude oil deal parameters affect differentials to benchmarks
  • Identifying Risk Exposure: Drivers and Measurement of Crude Oil Volatility
  • The Crude Oil Derivatives Markets: Futures, Options, Swaps
  • Hedging and the Basic Principle of Risk Offsetting
  • Locking In Arbitrage Using Derivatives
  • Risk Management Strategy and Hedge Ratios
  • Hedging Crude Oil Refining Margins
  • Risk Measurement, Monitoring and Reporting

Who should attend?

Crude oil marketers, traders; refining industry planners; banking, finance execs; lawyers, accountants; oil company graduate trainees; power companies with exposure to oil prices; refined product end-users. Banks with a presence in the commodities markets; swaps sales and marketing staff; regulatory and taxation authorities; oil refiners; National Oil Companies; independent exploration companies;  oil and commodities traders; business development staff at futures exchanges; fund managers; private equity executives.

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He was a director of the British Institute of Energy Economics (2013-2021) and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of large consulting firms including IPA Advisory Ltd and KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on oil trading. Peter has many years’ experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach and is accredited with the European Mentoring and Coaching Council. Peter has written a number of books with a business focus. He graduated in English and Oriental Studies from Emmanuel College, Cambridge in 1982.

Detailed Scope

This 3-Day programme provides a detailed knowledge of crude oil pricing and risk management. The course follows a logical order looking first at crude oil pricing, including how benchmark prices and grade differentials are set; using this to identify risk exposure from price and spread volatility; and then exploring the range of instruments that can be used to mitigate price risk.

The basic structures of commodity trading are systematically explained, including physical, forwards, futures, options and swap markets, and the interaction between the value of the physical crude oils and the instruments that are traded as derivatives.

The course explains how the benchmarks provided by Price Reporting Agencies such as Standard & Poors/Platts and Petroleum Argus are used in settlement of physical and derivative transactions. The drivers of crude oil prices relative to refined products prices are explained, as well as the changing drivers of market volatility, and how these are relevant to risk management.

A comprehensive overview is provided of crude oil price risk management, including quantitative tools for risk analysis; volatility and correlation measures; calculating hedging ratios; risk-offsetting and basis risk; liquidity risk management; modelling portfolio risk; Value-at-Risk (VaR) and other risk measures; and market risk reporting.

Delivery

The course is delivered over three days and is divided into 9 modules. Each module takes around 1.5 hours to complete, so around 4.5 hours per day of core tuition and exercises (3 modules per day). The course can be delivered online or in person at the client’s office. The style of tuition is informal, friendly and highly interactive, with regular recaps of key course material provided. The course simplifies and explains the jargon and technical terms used in the oil market, with hands-on exercises and visual aids used to help delegates retain what they learn. Delegates are encouraged to ask questions at the end of each module. Exercises and questionnaires are provided for overnight scrutiny to allow delegates to consolidate the intensive course materials provided.

 For course details and PDF please click on the link below:

Crude Oil Risk Management – course outline