Oil Supply & Trading: International Pricing, Markets, Products, & Operations (CLASSROOM) - OST2
Course Schedule
| Date |
Time |
Location |
Price* |
Registration Deadline** |
19-22 May 2025
Register
|
9:00-17:00
|
London, UK
|
GBP 3,995 (OST2-ALDN25-05)
|
11 Apr 2025
|
*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, market analysis, derivatives trading, risk management, and hedging.
After introductory discussions, the course will set the stage with crude oil quality, valuation, pricing mechanisms, markets, and price drivers. During the course, delegates will receive a similar look at the refined product fundamentals and markets of LPGs, gasoline, naphtha, diesel/gasoil, jet/kerosene, fuel oil, and specialty products.
The course reviews the key features of physical trading transportation and logistics. But the main focus is on approaches to trading, market analysis, trading strategies, details of how physical and paper markets work, and the use of derivatives for price risk management.
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 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
- 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
