£1,150.00

Oil Trading: Price Risk, Hedging, Derivatives

15 - 16 May 2025

Zoom Delivery

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Overview
Agenda
Participants
Instructors
Price
Certificate

Introduction

Oil Trading: Price Risk, Hedging, Derivatives is a 2-day course composed of 4 modules covering pricing, risk and hedging of oil trades. Each module lasts 2 hours with time allotted for questions and answers.

Module 4 is fully interactive with exercises and simulations using realistic data and trading scenarios in the oil markets. The delegates will look at how to hedge the physical positions, considering when to hedge, which is the best instrument to hedge with, and what basis risks they must live within real trading.

Participants are expected to have a basic knowledge of oil markets and price mechanisms.

Oil Trading: Price Risk, Hedging, Derivatives is a Virtual Course delivered through Zoom.
*Starts at: 8AM London | 12PM Dubai | 4PM Singapore
*Ends at: 1PM London | 5PM Dubai | 9PM Singapore

What will you Learn?

Pricing and market structure
Futures, swaps and hedging
Options and hedging
Hedging, pricing and risk management workshop

Agenda

Day 1

Module 1: PRICING AND MARKET STRUCTURE
*08:00 -10:15 (with 15 min break)

This course explains how oil is priced in commercial contracts and how this creates risk. We will then examine market structure (the shape of the forward curve of prices) and how this affects pricing and risk.
Pricing and structure will be tied to together to examine storage of oil, premiums and differentials, and arbitrage plays.

Key elements:
– Price reporting agencies
– Floating prices and fixed prices
– Futures contracts and predictions
– Contango and Backwardation
– Structure and trading: contango storage, premiums and arbitrage
*30 min break

Module 2: FUTURES, SWAPS AND HEDGING
*10:45 – 13:00 (with 15 min break)

This course will look at price risk in oil trading and how to deal with that risk. Dealing with risk means hedging and we will examine how hedging works.
We will explain the major derivatives: futures, forwards and swaps and how they relate to the forward curve. We will use exercises to show how hedging works. We will also discuss how these derivatives are used for trading and speculating.

Futures are a key derivative which is often used to directly price physical oil; we will look at this mechanism, the EFP.

Finally, we will discuss how traders derive prices using differentials and spreads.

Key elements:
– Assessing price risk: long, short, neutral
– Key derivatives: what are futures, swaps and forwards?
– Exchange of Futures for Physical
– Cracks spreads and differentials
– OSP’s and premiums in trading

Day 2

Module 1: OPTIONS AND HEDGING
*08:00 -10:15 (with 15 min break)

After a quick review of the basic derivatives (futures, swaps and forwards) we will explain options:
1) How does an option work, and how is it valued?
2) What is a call?
3) What is a put?

Options can be daunting because of the math and the vocabulary. This module will present options as simply as possible, avoiding complex math and explaining the jargon in layman’s terms.
We will look at how options can be a trading tool and a hedging mechanism.

This module will focus on client-based options for producers and consumers.
Finally, we will discuss exotic options; what are they and why are they “exotic”?

Key elements:
– Calls and puts
– European, American and Asian options
– Black-Scholes option pricing model
– Volatility: historical, actual and implied
– Caps and floors
– Collars, spreads, three-ways, and leveraged options
– Exotic options
**30 min break

Module 2: HEDGING, PRICING AND RISK MANAGEMENT WORKSHOP
*10:45 – 13:00 (with 15 min break)

The previous 3 modules built the bases for understanding and managing risk. This final module uses realistic scenarios and simulations for applying this understanding. We will work together to solve hedging and pricing problems on crude oil and products. The exercises will include the use of swaps and futures to calculate prices and hedge price risk.

The number and difficulty of the exercises will depend on the participants. The module will last 2 hours including time for questions.

Exercises (possible):
– Calculating cargo values using swaps: Gasoil from Jamnagar (India)
– Calculating delivered prices and making trading decisions: Jamnagar to West Africa
– Trading gasoil with an EFP: risks and hedging: Gasoil FOB Ventspils (Latvia in Baltics)
– Differential swaps: Jet Diff and Diesel Diffs in Europe
– Differential Risk, Arbitrage and EFP: Trading Jet from Kuwait to Rotterdam
– Gasoline Arbitrage: Europe vs. US market

***The class is interactive and live. Questions are welcomed throughout and web-based whiteboards will be used to demonstrate where required. Time may be allocated for examples suggested by participants in addition to prepared exercises.

Instructor

Chris

Chris has traded oil and energy in Europe, Africa, the Middle East and Asia during a career that spanned eighteen years.

He has worked for an oil major, a top trading company, and investment banks. He has extensive experience in supply and trading for refining systems as well as the challenges of running proprietary physical trading books in Europe, Africa, and Asia.

His experience was rounded out with several years of trading derivatives for investment banks in the Asia-Pacific region.

Since leaving trading in 2008 has taught finance and trading at top French business schools, presented corporate training in commodities and energy in France and abroad, and consulted with top European companies on trading and contract arbitration.

Price

Course price

2 Day Full Course – OIL TRADING: PRICE RISK, HEDGING, DERIVATIVES : 1150 GBP

What’s included?

The course fee covers:
– Participation in 8 hour Live Virtual Course
– The Course materials in e-version
– Industry Certificate of IBH: 8 CPD hours

Payment options

Payment options are available in two forms: bank transfer and card payment.

Course Venue

Zoom Delivery

Certificate

Demonstrate your new skills and gain a step up in your career with globally recognised CPD certifications.

Available Locations

Course Date

Clear

*Special group enrolment pricing

Olga Akhramovich
Project Coordinator
phone
mail

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IBH reserves the right to amend or cancel any course, course times, dates or published prices. Changes to course prices, times and dates will be advised before the course start date and any course already paid in full will not be subject to the increased price.

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