Oil Price Risk Management

Those attending this course 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. 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 Reuters, Platts, and Argus. As market conditions change, delegates will compare the performance of different instruments and learn to choose the appropriate one to meet their objectives.

Additional information

Program Type

Location

$2,100

Who Should Attend

This course is beneficial to those with a prior understanding of physical markets or who have taken Unit One and wish to learn more about derivatives and hedging. In addition it will benefit hose who interface with risk management in the industry; and those from banks, accountancy practices, and law firms.

Lecture Sessions

Risk Identification

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

Risk Management Instruments and Markets

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

Options

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

Optionality

  • Identifying and valuing optionality in the oil markets

Risk Management Techniques

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

Price Management

  • Exchange for physical
  • Trigger pricing

Trading Controls

  • Clearing and exchanges
  • Value at risk
  • Management Control