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Course Level
Intermediate
Delivery Method
Live Instructor-Led Virtual Course
Professional Development Credit Hours
15
Pre-requisites
Recommended: Oil Trading Orientation, or equivalent knowledge.

"I really enjoyed the course, well planned and executed. It covered a variety of topics related to trading and risk management suitable for the targeted audience. The instructors did a great job as presenters and instructors." Ecopetrol


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.

BAC: Mennta Energy Solutions is pleased to be endorsed by the BAC for Independent Further Education as a Short Course Provider. Endorsement covers courses delivered in the UK only.

GARP: Mennta Energy Solutions is registered with GARP as an Approved Provider of Continuing Professional Development (CPD) credits.

Mastering Oil Trading Concepts (VIRTUAL) - OTO2V


Course Schedule

Date Time Location Price* Registration Deadline**
14-18 Nov 2022
Register
10:00am-1:30pm (New York) / 15:00-18:30 (London)
Zoom: Americas to Europe
$(USD) 2,100.00
14 Oct 2022
12-16 Dec 2022
Register
8:00-11:30 (London) / 4:00pm - 7:30pm (Singapore)
Zoom: Europe to Asia-Pacific
$(USD) 2,100.00
4 Nov 2022

*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

Mastering Oil Trading Concepts is a VIRTUAL classroom course presented by the energy training experts at Mennta Energy Solutions.

This workshop builds on the oil trading basics 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 educational and enjoyable trading simulations.  These exercises are designed to reinforce and extend your learning from the class.

This virtual solution is comprised of six live instructor-led sessions hosted on state-of-the-art training software with video, audio, chat, live polls, breakout sessions and much more!  The program will also include several self-study assignments to maximize the time with the instructor.


Who Should Attend?

Class delegates include anyone wishing to know more about the world of oil trading, including traders, support staff, analysts, accountants and management in the areas of trading, supply, risk management, credit, finance, contracts, IT, operations, transportation and storage.


Course Content

Prerequisite to Session 1 Self-Study Assignment:  2 Hours On-Demand

  • Hedging with Futures and Options
    • Identify why hedging is important in managing volatility in profit and loss
    • Distinguish the types of hedges
    • Distinguish the differences between using futures and options for hedging purposes
    • Identify the problems caused by basis risk and how to deal with them
    • Identify the primary hedging strategies used by companies who hedge market risk

 Virtual Instructor-Led Sessions:  6 Sessions, 2 Hours per Session

  • Futures Trading Practicalities
    • Futures exchanges and their trading platforms
    • Contract specifications and termination rules
    • Margining systems and cash flows involved in opening, holding and closing futures positions
    • How physical delivery and cash settlement work for oil futures contracts
    • 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
  • Hedging Principles
    • Sources of risk
    • Price exposure, pricing mechanisms, priced and unpriced trades
    • Aim and purpose of short-term (operational / tactical) hedges
    • Aim and purpose of strategic hedges
    • Timing of hedging decisions
    • Hedging with futures
    • Use of swaps and options in hedging
    • Basis risk, hedge efficiency, correlation and hedge ratios
    • Management of basis risk using basis swaps and EFPs
    • Hedge accounting
    • Impact of market structure on hedging
  • Hedging the Refinery
    • Strategic and tactical objectives
    • Basic refinery hedging choices and plan
    • Refinery hedging variations
    • Refinery hedging choices: operational, opportunistic, strategic
    • Hedging and refinery flexibility
  • 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
    • Storage
      • Types of storage
      • Standard contract terms
      • Costs
      • Evaluating storage opportunities
      • Implications of holding inventory (tax, reporting)
  • 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
  • Crude Forward Markets
    • How forwards are used
    • Brent (BFOET) market, including bookouts, nominations, contract terms and timeline
    • Partials markets for BFOET and Dubai
    • North American benchmarks
  • Products Valuation, Blending and Trading
    • Effects of refinery process choices:
      • Feedstock selection
      • Product output objectives
      • Typical yields from different units; process flexibility and effects on product quality
    • Economics of product blending:
      • Quality of different blendstocks and their valuation
      • Evaluating product value
      • Linear/non-linear blending calculations
      • Mininimizing quality giveaway
      • Implications of biofuel blending
    • Arbitrage trading:
      • 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
    • Sources of price information:
      • Review of key information sources in different markets
      • Price reporting methodologies, including Platts e-window process
      • Assessments of illiquid markets, including calculations of dated Brent
  • Advanced Trading / Financial Engineering
    • Delta hedging
    • Monetisation of physical flexibility
    • Dealing and origination
    • Algorithmic and high-frequency trading
  • Forward Curves and Market Structure
    • Effects of contango/backwardation on trading behaviour
      • Inventory management
      • Hedging
      • Storage play opportunities
  • Trading Controls, Ethics & Compliance
    • Constraints on trader activity
      • Government regulations
      • Corporate policies
      • Position and market risk limits
      • Credit and counterparty constraints
  • What is allowed, and what is ethical?
    • Insider knowledge
    • Market manipulation (wash trades, squeezes, quote stuffing, etc.)
    • Speculative position taking
  • Measurement and control of trading exposure
    • VAR and VAR limits
    • Position limits
    • Loss limits
  • Regulation of oil trading
    • Exchange trading and position limits
    • OTC trading and clearing: EMIR, Dodd Frank Act
    • Price reporting: voluntary code and European regulation on benchmarks
  • Interactive content during the VILT sessions will include:
    • Exercises carried out during the VILT sessions, in breakout groups, on product blending opportunities, cargo pricing, crude quality and hedging.
    • A multi-round trading game and a competitive hedging simulation game, which would be introduced during the VILT sessions and played by delegates in their own time between VILT sessions.

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