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Available dates

Dec 9—12, 2019
4 days
London, United Kingdom
GBP 4195 ≈USD 5445
GBP 1048 per day


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About the course

Explore physical and financial oil trading & understand the markets

Learn to use trading and hedging to profit from, and protect against, oil market movements. Setting the scene for oil trading, this training course examines markets, pricing and products to provide participants with a thorough overview of the sector. This course will explore mechanisms and tools for both physical and financial oil trading allowing unparalleled access to the world of trading, its role within the oil industry and its importance in the success of oil companies.

Participants will leave this course with a thorough understanding of the workings of crude oil markets and the range of contracts, tools and techniques available to traders.

Attend this practical and interactive 4-day training course and enhance your knowledge on the following key areas:

  • Supply and demand: fundamentals and implications
  • Crude evaluation and selection
  • Physical markets, pricing & price exposure
  • An introduction to brent
  • Oil trading and jargon
  • Hedging instruments: forward & futures
  • Oil refining
  • Swaps
  • International product trade flows and transport
  • Trading: options and risk management strategies
  • Dated Brent and the 21 Day BFO market & CFD’s
  • Market reporting and price assessment
  • ICE
  • Management issues
  • Featuring: An electronic refining & trading simulation - put into practice what you have learnt from the course by competing against the other delegates in this real life electronic trading game

How this course will help you

You will:

  • Review crude oil supply, demand and products
  • Understand crude oil refining, evaluation and selection
  • Explore physical markets, shipping and contracts
  • Appreciate pricing formation and price risk management
  • Learn about futures, swaps, options and over- the-counter markets
  • Become familiar with trading techniques and terminology
  • Participate in trading & hedging exercises and improve negotiation skills


Day 1

Crude Oil

History of Oil and Oil Trading

  • How oil trading has developed over the last 100 years
  • The growth and decline of the role of major oil companies
  • OPEC its history and influence over world oil markets
  • The role of traders, speculators, banks, hedge funds and algorhythmic trading

Physical Crude Oil

  • Crude oil classification, important characteristics, and assays
  • Different types of crude oil production and the associated costs
  • Logistics and storage
  • The Growth of North American Shale and Oil Sands Crude Supply

Global Crude Oil Supply and Demand and Current Market Influences

  • Crude oil fundamentals and implications
  • Oil Reserves and Production
  • The future of the oil price in world markets
  • What are the drivers for crude oil supply and demand?

Crude Oil Pricing Methodologies and Benchmarks

  • Physical crude oil trading and pricing mechanisms
  • Introduction to price exposure and positions
  • The role of benchmarks in crude oil pricing
  • Brent crude oil as a benchmark and its evolution
  • Dated Brent and Brent forwards

Trading Terminology

Introduction to futures trading – Crude Oil futures

Day 1 Simulation: trading an oil based crude futures contract, a new unique simulation based on real historic events and news feeds where the price path actually reflects participants’ actions

Day 2

Refining and Oil Products

Oil Refining 101, Refining Economics and Current Oil Refining Issues

  • How refineries work
  • What are refining economics?
  • Gross Product Worth
  • Refinery logistical constraints
  • Oil refining today and the future

Oil Products, their uses, global specifications and future developments

  • Gasoline
  • Naphtha and Petrochemicals
  • Kerosene/Jet Fuel
  • Gasoil/Diesel
  • Fuel Oil
  • LPG

Oil Product Supply and Demand, Trade Flows and logistics

Oil Futures 2 – Introducing products and product cracks

Day 2 Simulation: Arbitrage Trading, using futures crude and products contracts to simulate arbitrage trade flows. Once again we will be using a new unique simulation based on real historic events and news feeds with participants being able to take on the role of oil refiner, market maker or even as a broker and where the price path actually reflects participants actions

Day 3

The Financial Markets

  • The Growth and Evolution of Futures, Derivatives and Cleared Markets in Oil Trading
  • How an OTC oil contract works
  • Hedging and Speculative Trading
  • The role of different market participants
  • Exposure, risk limits, the role of middle and back office
  • Clearing, how it works in both traditional and otc cleared markets and requirements on both company and individuals.
  • Time Spreads, Grade Spreads, Crack Spreads, Arbitrage and Relative Value trading with worked real world examples in both crude and products
  • Technical Analysis
  • Options Trading

Day 3 Simulation: Relative Value Trading Participants working in pairs will have some historic price relationships supplied between a number of crude oil and products markets, and they have to use this to spot disparities in the forward curve as the simulation progresses, taking into account relevant information supplied about the recent history and any news relevant to this relationship. Again depending on the number of participants, it is possible to take on a number of roles

Day 4

Risk Management, Trading Best Practice and Decision Making

The Psychology of Trading and Decision Making

  • The “Financialization of Energy Markets
  • Theories of market behaviour: Efficient markets vs. Adaptive Market Hypothesis
  • How we make decisions
  • Overview of Behavioural and Cognitive Bias
  • Risk Aversion
  • Overconfidence
  • Persuasion and hindsight bias
  • Information bias
  • Groupthink
  • A Framework for Understanding Trader Psychology

Shipping, physical and freight forward markets

  • How physical oil shipping markets work
  • Vessel types
  • Freight contracts explained
  • Worldscale
  • Freight Forward Agreements, their evolution and growth

Risk management best practices

  • Defining risk management activities and terms
  • Close out value - liquidity measures in OTC markets
  • Understanding and interpreting value-at-risk measures, VaR
  • Stress tests as a complementary tool to VaR and other market risk measures
  • Risk Reports - Enhancing exposure reports with risk analysis
  • Risk Framework

Recent changes in regulation directly effecting trading both now and in the future

MIFID2, MAD and other regulatory changes directly effecting oil trading and traders

The Current Oil Trading Environment and Oils Interaction with Other Commodities

  • Current issues around supply and demand
  • The growth of biofuels and alternative fuels
  • Oil relationship with other commodities
    • Gas/LNG
    • Power
    • Coal
    • Agricultural Products

Oil Relationship with other asset classes

Simulation 4 : European Refinery Trader Participants working in pairs have a refinery or a group of refineries to supply and hedge. Players have to decide when to run, where to source crude oil from including the ability to store crude and products and trade and hedge accordingly, trading oil futures, and oil OTC products. This simulation will be complex and will again use our unique historically based simulator with market movement and news story’s reflecting actual events

Who should attend

  • Traders
  • Refiners
  • Sales & marketing
  • Account managers
  • Economists
  • Analysts
  • Risk managers
  • Operations managers

Trust the experts

Andy Mills

Andy is a highly experienced commodity trading and risk management professional with a demonstrated history of working across commodities. Skilled in Portfolio Management, Commodity Risk Management, Consultancy, Training and Proprietary Trading. Andy has worked as a Trader for BP, UBS, Engen Petr...


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