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Course Level
Intermediate
Delivery Method
Classroom Instructor-Led Course
Professional Development Credit Hours
24
Pre-requisites
Recommended: Oil Trading Orientation, or equivalent knowledge.

"The course offered a ton of relevant information from both a crude oil and refined products trading perspective. Highly recommend this course for those who have been exposed to oil & gas trading but want to solidify their understanding of foundational concepts. This offering was well led and engagement amongst the group of participants was excellent. Exercises throughout the course were thought provoking and aimed at honing in on base principles. Probably best training course I've taken in my 10 year career in industry." - Motiva

Faculty

Mary Jackson has over twenty-five years' experience in the energy industry. After university she began her career at BP, working in the information management group, before joining the Manufacturing, Supply and Trading department. She subsequently worked at Saladin as a consultant, working closely with clients throughout the world and providing consultancy advice on energy market analysis, trading and risk management. In several senior roles at Saladin, she managed the energy consulting team, ran the energy market information service and directed strategy for new software and information product development.

Since 2000, Mary has worked as an independent energy market consultant and she formed Kingston Energy Consulting with Nigel Harris in 2002. Kingston Energy provides consultancy services to companies involved in energy markets and trading. A key area of work has been the European natural gas market - Kingston Energy has researched and authored a well-respected report on European natural gas trading which has been published annually since 2004.

Mary has lectured regularly for Mennta Energy Solutions on energy markets, trading and risk management and is also a regular speaker and panel member at public conferences. She has written articles for industry publications including Harts Energy Markets, Energy Risk, Global Energy Business and Petroleum Review.

Nigel Harris is a director and principal consultant at Kingston Energy Consulting, which he founded with Mary Jackson in 2002. He has been helping energy traders to analyse and understand the markets for over 25 years, initially as a developer of market analysis software systems, and more recently as a consultant. At Kingston Energy Consulting, his main focus is on providing education and information transfer to participants in the energy trading business, through instructor-led classroom training, web-based training development, research projects, workshops, briefings and research-based report writing. In his work with Mennta Energy Solutions, he has created a library of new instructor-led and web-based courses on European gas and power markets and trading. In 2005, he worked with Mary Jackson to develop the popular Oil Trading Orientation course, which has since been presented at venues all over the world. He has also extensively revised and updated many existing courses on derivatives, hedging and risk management.   He regularly presents this material both at public venues and as in-house, often customised, courses. He is co-author of a series of highly regarded reports on European natural gas trading and has also contributed to reports on power markets and oil trading. In previous roles, he was a key member of the team that initially designed and developed Saladin 's innovative Petroleum Analysis Workstation, a system that became an industry standard for historical price analysis during the 1990s and remained in use in the industry for two decades. During this period, he worked closely and extensively with oil and gas traders around the world to understand their information and analytical requirements. He also spent some years as an independent consultant, working mainly with software and information providers to help them better understand the oil and gas trading sectors.

Accreditations

NASBA: Mennta Energy Solutions is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org


CPD Certification Services: The CPD Certification Service works with Mennta Energy Solutions to ensure valuable knowledge is structured to complement the universal guidelines of Continuing Professional Development. Mennta Energy Solutions courses are approved by CPD at one credit per training hour.


Mastering Oil Trading Concepts (CLASSROOM) - OTO2

Course Schedule

Date Time Location Price* Registration Deadline**
1-3 Jul 2024
Register 		9:00-17:00
 London, UK
 GBP 3,235 (OTO2-ALDN24-07)
 31 May 2024
15-17 Jul 2024
Register 		8:00am-4:00pm
 Houston, TX
 USD 3,920 (OTO2-BHOU24-07)
 14 Jun 2024

*Prices do not include VAT, GST, or any other local taxes. All applicable taxes will be added to the invoice.
**Please register by the deadline to help us ensure sufficient attendance and avoid postponing the course.

Course Summary

This three-day workshop is designed to follow the popular Oil Trading Orientation (OTO) course.    Mastering Oil Trading Concepts (OTO2) builds on the basics learned to extend your understanding of the complex world of oil trading and take your skills to a higher level.  

Topics explored during the course include crude oil valuation and selection, products valuation, blending and trading, pricing mechanisms and methodologies, practicalities of hedging and futures trading advanced trading and financial engineering, forward curves and market structure, trading controls, ethics and compliance.

A key element of the course is that you get the chance to put the knowledge learned into practice through a series of fast-paced, educational and enjoyable team trading simulations.   These exercises are designed to reinforce and extend your learning from the class.

Please note: a laptop and up-to-date version of Office (Excel) is required in order to engage in market data.

Who Should Attend?

Class delegates include anyone who understands the fundamentals of oil trading and needs to know more.  Including, traders and non-traders wishing to take the next step in the world of oil trading.  Including support staff, analysts, accountants and management in the areas of trading, supply, risk management, credit, finance, contracts, IT, operations, transportation and storage.

Course Content

Crude Oil Valuation & Selection

  • How refineries evaluate different crudes, comparing crudes using LP models and netback calculations, marginal values, transportation and other logistical considerations
  • Crude oil quality differences between different regions; crude oil blending
  • Crude oil yields for different refinery configurations
  • Assessing crude differentials, what affects grade differentials and how to assess them; monitoring and analysing differentials and basis

Products Valuation, Blending & Trading

  • Refinery process choices, impact of feedstock selection, unit configuration and operating conditions in key refinery units
  • Product blending practical issues
  • Blending economics and product valuation in gasoline, middle distillates and fuel oils
  • Ethanol, biofuels and renewable certificates trading
  • Arbitrage trading and evaluation of arbitrage opportunities

Pricing Mechanisms and Methodologies

  • Pricing mechanisms for spot and term contracts
  • OSPs & tenders, different pricing formulas used in different regions
  • Calculations of discounts, premiums and quality escalators
  • Review of key information sources in different markets
  • Price reporting methodologies, including Platts window process
  • Assessments of illiquid markets, including calculations of dated Brent

Crude Forward Markets

  • How forwards are used
  • Brent (BFOE) market, including bookouts, nominations, contract terms and timeline
  • Partials markets
  • Dubai market and North American crude oil markets

Hedging Principles

  • Aim and purpose of short-term (operational / tactical) hedges
  • Price exposure, pricing mechanisms, priced and unpriced trades
  • Timing of hedging decisions
  • Management of basis risk: basis swaps, EFP
  • Aim and purpose of strategic hedges
  • Hedging horizon, timing and approach

Futures Trading Practicalities

  • Exchanges and their trading platforms
  • Contract specifications and termination rules
  • Margining systems and rules, including SPAN, scanning and intermonth ranges etc.
  • Cash flows involved in opening, holding and closing futures positions
  • How physical delivery and cash settlement work for oil futures contracts
  • Market open, close, settlement, trade at settle, minute markers
  • EFP and EFS deal process:   what is agreed, how they are invoiced, why and when they are used

OTC Derivatives Markets

  • Types of instruments: swaps, basis swaps, options
  • Common indices and settlement rules
  • Trading platforms, clearing and settlement in OTC trading
  • Use of CFD/DFL/BFOE/ICE to manage Brent price risk
  • Use of swaps/EFS/EFP to manage Dubai price risk

Hedging the Refinery

  • Objectives of refinery hedging
  • Choice of hedging instruments
  • A basic refinery hedging plan and its implications
  • Operational, opportunistic and tactical hedging choices

Freight & Logistics

  • Freight costs and shipping economics
  • Factors to consider when chartering a vessel
  • Bottlenecks and key areas of delay, including demurrage considerations
  • Freight rates - calculation of Worldscale rates and time charter equivalents
  • Pipelines and rail - scheduling, tariffs, logistics
  • Oil Storage - types of storage, contract terms, costs, evaluation of opportunities, implications of holding inventory (tax, reporting)

Forward Curves and Market Structure

  • Effects of contango/backwardation on trading behaviour - inventory management, hedging, trading opportunities
  • Contango and backwardation and their causes; economic theories of forward curves
  • Financial modelling of oil price behaviour - Black-Scholes and other frameworks

Advanced Trading / Financial Engineering

  • Delta hedging
  • Monetisation of physical flexibility
  • Dealing and origination
  • Algorithmic and high-frequency trading

Trading Controls, Ethics & Compliance

  • Constraints on trader activity: government regulations, corporate policy, trading limits
  • Trading ethics, insider trading, market manipulation
  • Measurement and control of trading exposure, including Value at Risk and credit controls
  • Regulation of oil trading: exchanges, OTC markets and price reporting

During the course, delegates get hands-on experience of many aspects of trading through team exercises covering:

  • Crude oil trading for refinery supply and for profit
  • Trading to maximize the value of refined products storage
  • Hedging oil production using swaps and options
  • Contract negotiation
  • Evaluation of product blending opportunities
  • Freight rate calculation
  • Refinery hedging
  • Hedging with futures
  • Trading ethics

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