International Oil Trading and Pricing

This course covers the basic principles of oil trading and the markets. Through a variety of case studies, delegates will learn the techniques involved in trading and how to address day-to-day problems. During the week, in a continuous theme case study, syndicate groups will manage their own company positions of production, refinery supply, product purchase/disposal and speculative trading, while reacting to new positions generated and changing market prices which simulate a live situation. Delegates will have the opportunity to trade both structured and live markets. It is recommended that delegates should have attended "International Oil Supply, Transportation, Refining and Trading" (SP1) or have working knowledge of the subjects covered in that course.

After reviewing the background of supply, refining and transportation, the course focuses on the key markets, pricing and the mechanisms involved in trading. Aspects of the various exposures encountered in trading are covered together with an introduction to price risk management. Syndicate exercises will address each skill required. Additionally, during the week, in a continuous theme case study, each syndicate group will manage their own company positions of production, refinery supply, product purchase/disposal and speculative trading, reacting to new positions generated and changing market prices which simulate a live situation. Delegates will have the opportunity to trade both structured and live markets.

What you will learn

• The structure of the oil markets and pricing
• Keys to trading: product quality, freight costs and refining process
• Comprehend the Brent Market and its influence on international pricing
• Position management with basic hedging tools
• The structure of purchase/sales contracts including exposures and transactions
• Price risk management
• Developing successful trading strategies
• The use of trading instruments to capture the market
• Use of Freight Forwards to manage freight risk
• Working the arbitrage
• Structured and live markets

Maximise your learning experience by signing on to a Diploma Programme for our Gold Level Supply and Trading courses. Click here for further information.

Do you have a question or enquiry regarding this course?

Please contact your local sales team:

Asia Pacific Europe, Middle East, Africa, Central & South America North America

• Personnel who are entering the trading arena
• Oil company staff who interface with the oil trading sector and require a better understanding of trading practice, such as management accounting, financial control, treasury, supply or production functions
• Those in the legal and banking fields who want a better understanding of trading practice

Not sure if you have the appropriate experience? Click here to test yourself on the knowledge necessary for this course.

Introduction

• Terms used
• Units used

Crude Oil and Product Markets

• Why trade?
• Supply/demand
• How the markets work

Shipping and Freight

• Freight and Worldscale
• Charter party main terms
• Charter negotiation
• Demurrage
• Tanker characteristics
• Freight exposure and freight forwards

Refining

• Products, key qualities
• Overview of processes
• Yields and netbacks

Pricing

• Price reporting
• Pricing mechanisms
• Price risk

Contracts

• Outline structure and clauses
• Issues and problems

Price Risk

• Summary of markets (Physical, Forwards, Futures, Swaps)
• Understanding long and short positions
• Introduction to hedging tools
• Basic risks
• Significance of market inquiry

Product Trading

• Making a sale
• The role of the broker
• Developing successful trading strategies
• World product markets and pricing
• Capturing the arbitrage
• Product specs and quality
• Implied values of quality
• Intermediate valuation
• Futures markets
• Features of the key futures markets
• Volume, open interest and margins
• Delivery
• ADP, EFP

Crude Trading

• The world crude oil markets
• Market fundamentals
• Developing successful trading strategies
• Negotiating term deals
• Other risks and exposures
• Bills of lading and other documents
• Credit control and letters of credit
• Counterparty selection
• Inspection and losses
• Insurance disputes claims
• Technical analysis
• Charting
• Statistical/rule based

Introduction to Advanced Instruments

• Options
• CFDs and swaps
• Spreads and basis trading

Case Studies and Exercises Included:

• GPW, freight and netback
• Arbitrage; Blending and value
• Negotiating a term crude oil deal
• Hedging and basis risk
• Executing an EFP
• Managing ongoing positions
• Introduction to options
• Trading the live market

Faculty

Robin A Burley is principal consultant with Kennet Oil Logistics, a company established in 1990 providing expertise in the international supply, trading and transportation sector. During his 30 years experience in the oil industry he has worked with BP including Marine and Supply Departments, and Gulf Oil including Trading and Transportation, Refining and Marketing functions. Besides the day-to-day management and negotiation of oil supply, trading and transportation deals, he has been involved in a variety of oil logistics projects throughout the world. He has lived in the USA, Europe and the Middle East, and is a contributing author to the Oil Trading Manual (pub. Woodhead 1995).

Testimonials

“Thought the course was great, not just for the content learned but also from a networking aspect & gaining an understanding of how other companies work and also meeting people from all areas of the oil industry.” C.C., Chevron

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