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Course Level
Intermediate
Delivery Method
Classroom Instructor-Led Course
Professional Development Credit Hours
32
Pre-requisites
There is no pre-requisite for this course.


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.


Oil Supply & Trading: International Pricing, Markets, Products, & Operations (CLASSROOM) - OST2


Course Schedule

Date Time Location Price* Registration Deadline**
26-29 Nov 2024
Register
9:00-17:00
London, UK
GBP 3,995 (OST2-ALDN24-11)
11 Oct 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 four-day, highly interactive classroom course provides a detailed guide through the world of oil and products trading. Delegates will learn the key building blocks of knowledge for crude oil and petroleum product trading, pricing, markets, and operations.

After introductory discussions, the course will set the stage with crude oil quality, valuation, pricing mechanisms, markets, and price drivers. Delegates will receive a similar look at the refined product fundamentals and markets of LPGs, gasoline, naphtha, diesel/gasoil, jet/kerosene, fuel oil, and other specialty products.

Next, participants will be exposed to trading operations such as contracts, transportation, storage, and logistics.

Finally, an in-depth look at trading and risk management that includes strategies, technical analysis, paper markets, futures, options, hedging, regulations, and more.

During the course, delegates will have an opportunity to apply lecture topics to real-world situations through several competitive team exercises. By simulating different aspects of trading and risk management, delegates will gain direct experience on the most common issues traders must assess, and the decisions that they must make.


Who Should Attend?

The course is ideal for new or recent entrants to oil trading. In addition, any professional within an oil company or industry service company that interfaces with supply, refining, trading, and transportation functions would benefit from this training - such as legal, finance, insurance, and IT.


Course Content

Introduction to trading

  • Trading objectives & participants
  • What is traded?
  • Trading locations
  • Trading instruments & markets 
  • Trading units & conversions

Crude oil quality and valuation

  • How crude oil quality affects value:
    • Types/sizes of hydrocarbons
    • Contaminants
    • Key quality characteristics: API gravity, sulfur content, pour point, viscosity, TAN etc
  • Crude valuation: netback value
  • Price drivers for individual cargoes

Pricing mechanisms

  • Spot and term markets
  • Fixed, OSP, posted prices
  • Floating prices: pricing dates/averaging periods
  • Price reporting agencies & methodologies
  • Crude oil & refined product benchmarks
  • Assessing differentials to benchmarks

Crude oil market fundamentals & price drivers

  • How market fundamentals affect crude prices:
    • Economic factors
    • Production, including impact of OPEC
    • Trade flows
    • Storage, including strategic storage reserves
    • Geopolitics
  • Crude buying patterns

Refined product market fundamentals & price drivers

  • Impact of market fundamentals on prices for refined products:
    • Economic factors
    • Regional consumption
    • Trade flows
    • Demand trends

Refined product markets

  • LPGs, gasoline, naphtha, diesel/gasoil, jet/kerosene, fuel oil, specialty products
  • Traded grades, market features, price linkages, benchmarks

Forwards & crude oil benchmark markets

  • What are forwards?  How are they used?
  • Key forward markets: North Sea, Middle East, North America
  • History of benchmark, production rates, settling forwards 

Trading strategies

  • Geographic arbitrage
    • Evaluating arbitrage opportunities
    • Sources of arbitrage profit
    • Hedging arbitrage trades
  • Quality arbitrage/blending
  • Storage & forward curves
    • Storage types & contracts
    • Factors affecting storage rates
    • Storage valuation
    • Storage trading strategies
    • Forward curve drivers
  • Other types of arbitrage
  • Spread trading

Mechanics of trading & contracts

  • Organization of trading
  • Process of physical negotiations, including use of brokers
  • Trading platforms
  • Essential contract terms
    • Quantity
    • Quality
    • Delivery
    • Incoterms
    • Credit terms
  • Costs of trading

Transportation & logistics

  • Cargo trading
    • Tankers: physical characteristics
    • Charter contract types
    • Freight costs/trends
    • Freight terminology: laytime, laydays/laycan, demurrage
  • Pipeline trading
    • Crude oil pipeline operations
    • Product pipeline operations
    • Tariffs
  • Rail
    • Features
    • Tariffs
  • Delivery – what can go wrong

Technical analysis

  • What is it?  How is it used?
  • Key technical indicators: support & resistance, candlesticks, moving averages, RSI

Paper markets

  • Exchange vs OTC trading
  • Key instruments 
  • OTC derivatives
    • Types of swap
    • OTC options: caps, floors, collars

Futures markets

  • Key features
  • Main oil futures contract specifications
  • Expiry rules
  • Relationship to physical market & physical delivery
  • Role of clearing house
  • Margining & cash flows
  • Alternative delivery procedure (ADP)
  • Trade at settle (TAS), tradable markers (TAM)
  • Futures vs forwards

Exchange traded options

  • What is traded?
  • Rights and obligations of long/short positions
  • Options pricing

Risk management/measurement

  • Sources of risk
  • Types of price exposure: strategic, tactical
  • Measuring & controlling risk
  • Value at risk: what is it?  How is it used?

Hedging

  • What is it?
  • Hedging objectives
  • Use of hedging
    • Hedging with swaps
    • Hedging with options
  • Risks of hedging

Hedging with futures

  • How to hedge with futures
  • Advantages and disadvantages
  • EFPs: what are they? How are they used?
  • Basis risk
  • Managing basis risk using basis swaps, including Brent CFDs & DFLs
  • EFS

Regulation of trading markets

  • Key regulations
  • Trading controls – what traders can/can’t do

 

During the course delegates will participate in team exercises and trading simulations covering topics including:

  • Crude oil trading
  • Crude oil netback value
  • Refined products trading
  • Spread trading
  • Freight
  • Contract negotiation
  • Technical analysis
  • Use of storage
  • Pricing
  • Price exposure and risk management
  • Value at risk
  • Hedging

 

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