International Oil Trading and Price Risk Management

Course attendees learn how to negotiate, structure and cost deals, calculate profitability, charter a ship through a broker, and examine the legal and operational aspects of trading. As decision makers on a crude oil and refined product trading team, they will gain the skills to identify and manage risk by using futures, forwards and over-the-counter instruments. They manage their trading book and make decisions using current market pricing of crude oil and refined product markets worldwide as seen in daily price reports from Platts and Argus.

Additional information

Program Type

Location

Dates

September 20 – 23, 2021

$2,100

Who Should Attend

This course will benefit anyone coming into trading from elsewhere in the industry; those in supply and marketing functions looking for a wider understanding of the market; those in oil companies, banks, law firms, accountancy practices, the media, and elsewhere who interface with traders and trading. Those moving into oil markets from the financial markets, or elsewhere, will also find this course beneficial.

Lecture Sessions

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 broking
  • Costings
  • Comparing alternative outlets
  • Arbitrage trading
  • Valuing product quality

Contracts and Trading

  • Negotiating a deal
  • Writing a contract
  • Calculate the profitability of deals
  • Spread trading
  • Contango and backwardation
  • Legal issues

Tendering

  • Prepare and evaluate a tender

Chartering and Freight

  • Calculating freight costs using Worldscale
  • Chartering a ship
  • Calculate demurrage
  • Freight exposure and swaps

Performance and Credit

  • Client /counterpart risk
  • Documentation

Risk and Exposure

  • Identifying and minimizing risks in trading
  • Price exposure
  • Separation of price and supply

Risk Management Instruments

  • Futures markets
  • Forward markets
  • Swaps and OTC markets
  • Introduction to options
  • Comparison of instruments

Risk Management Techniques

  • Hedging with futures and swaps
  • Basis risk
  • Refinery margin management

Trading Controls

  • Mark to market