Supply Chain Essentials and International Oil Trading and Price Risk Management

This course is offered as a five-day program or it can be broken out into two units: Unit One runs for two days and Unit Two runs for three days. In Unit One, attendees learn how refineries select and value various crude oils and how the ‘gross product worth’ within the refinery contributes to establishing the market value and choice of crude oils available in the international marketplace. With Unit Two, attendees learn how to negotiate 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 manage their trading book, understand risk management instruments, 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

Unit

Full Program, Unit One, Unit Two

Dates

October 31 – November 4, 2021

$1,250$4,750

Clear

Who Should Attend

Unit One will benefit both those currently involved in the downstream marketing and supply trading undertakings and those that are in associated and support functions to these core marketing functions.

Unit Two 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.

Accordion Content

Unit One: Supply Chain Essentials
(2 Days)

Crude Oil

  • Types of crude oil
  • Evaluation of crude oils
  • Crude oil markets
  • Crude oil pricing

Oil Refining

  • Distillation and reforming
  • Treating and conversion
  • Cracking
  • Refinery economics and optimization
  • Blending
  • Refinery margins

Logistics

  • Scheduling oil supply

Oil Products

  • Refined product quality and specifications
  • Value of quality
  • Downstream Marketing

Processing

  • Processing deals

Unit Two: International Oil Trading and Price Risk Management
(3 Days)

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