International Oil Trading And Price Risk Management Training Course

INTRODUCTION

International oil trading is as volatile as it can get and understanding the intricate dynamics of both financial and physical markets is essential for managing price risk effectively. This comprehensive International Oil Trading and Price Risk Management training course provides participants with in-depth knowledge of advanced trading techniques and risk management strategies relevant to the global oil industry. By exploring real-world case studies, participants will gain practical insights into the complexities of oil trading, including the management of price risk for producers, refineries, and consumers. This International Oil Trading and Price Risk Management course focuses on the key aspects of oil trading, from pricing mechanisms to the development of robust trading strategies. Participants will learn how to navigate the futures and forward markets, understand the role of EFPs, swaps, and CFDs, and apply hedging techniques to mitigate price risks. By the end of the course, delegates will be equipped with the skills necessary to manage trading positions and construct effective purchase/sale contracts in the international oil market.

COURSE HIGHLIGHTS

• Freight Costs and Hedging: Understand the significance of freight costs in oil trading and learn how to hedge these effectively.
• Crude Oil Pricing: Explore how international crude oils and petroleum products are priced in global markets.
• Futures and Forwards Trading: Gain practical knowledge on trading in the futures and forwards markets, and how to use these instruments to manage risk.
• EFPs, Swaps, and CFDs: Learn how to use exchange of futures for physicals (EFPs), swaps, and contracts for differences (CFDs) in oil trading.
• Options Theory: Delve into the factors that influence options trading and how to apply these in managing price risk.
• Hedging Techniques: Master the application of hedging techniques within trading positions, with a focus on managing refinery margins and freight costs.
• Trading Strategy Development: Develop and manage successful trading strategies tailored for producers, refineries, and consumers.
• Contract Construction: Understand the essentials of constructing purchase/sale contracts and managing the associated exposures.

WHO SHOULD ATTEND

This International Oil Trading and Price Risk Management training course is ideal for:

• New Entrants to Oil Trading: Personnel who are new to the trading arena and seek a comprehensive understanding of the market.
• Oil Company Staff: Employees who interact with the oil trading sector, including those in operations, accounting, financial control, treasury, supply, or production functions.
• Legal and Banking Professionals: Individuals in the legal and banking fields who need to deepen their understanding of oil trading practices.

COURSE OUTLINE

Introductory Material

• Overview of trading and markets
• Price reporting and pricing mechanisms

Crude Oil Trading

• International pricing of crude oils
• Fundamentals of crude oil trading
• Understanding Dated Brent and Brent Markets

Products Trading

• Mechanics of trading petroleum products
• Role of oil broking and costings
• Evaluating and comparing alternative outlets
• Fundamentals of arbitrage trading and valuing product quality

Contracts and Trading

• Negotiating and writing effective contracts
• Calculating profitability in trading deals
• Understanding spread trading, contango, and backwardation
• Legal considerations and tendering processes

Chartering and Freight

• Calculating freight costs using Worldscale
• Processes of chartering a ship and calculating demurrage
• Managing freight exposure through swaps

Performance and Credit

• Assessing client/counterpart risk
• Essential documentation in trading

Risk and Exposure

• Identifying and minimizing trading risks
• Managing price exposure and the separation of price and supply

Risk Management Instruments

• Overview of futures and forward markets
• Understanding swaps and OTC markets
• Introduction to options and comparison of risk management instruments

Risk Management Techniques

• Effective hedging with futures and swaps
• Addressing basis risk and managing refinery margins

Trading Controls

• Mark to market and trading controls

GENERAL NOTES

• The course is delivered by experienced trainers with extensive expertise in the field.
• The training includes a mix of practical activities, theoretical knowledge, group work, and case studies.
• Participants will receive comprehensive training manuals and additional reference materials.
• A certificate is awarded upon successful completion of the course.
• Custom-tailored courses to meet specific organizational needs are available. For more information, contact us at training@skillsforafrica.org.
• The training will be conducted at the Skills for Africa Training Institute in Nairobi, Kenya.
• The training fee covers tuition, materials, lunch, and the training venue. Accommodation and airport transfers can be arranged upon request.
• Payments should be made to our bank account before the training starts, and proof of payment sent to training@skillsforafrica.org.