ITO - Trading Oil on International Markets



Course Dates: 22 - 26 May and 16 - 20 October 2017

Møller Centre, Churchill College, Cambridge, UK

Course fees:  UK Pounds £3,800 plus VAT*where applicable

This in depth course teaches you to make effective trading decisions to maximise company profits. You will develop an understanding of the economics of trading and the management of inherent price risks. By trading live crude oil and refined product markets worldwide under the guidance of the staff, you gain confidence in setting a strategy and in reacting to events as they happen using real time information services.

The economics of trading are fully studied with delegates negotiating and costing deals, calculating profitability, chartering a ship through a broker and examining the legal and operational aspects of trading. Price risks are identified and managed using the futures, forwards and over the counter markets. Delegates also prepare a tender. The separation of price risks from supply risk is discussed.

Invincible's corporate position is marked to market and reviewed daily. Market conditions are discussed to gain an understanding of how prices are established on the international markets and what factors influence price movements.

Exercises are performed in syndicates, with comprehensive debriefs studying the consequences of the decision made. The course expects a high degree of participation from delegates and there is a high staff to pupil ratio.

Course Timetable

Day 1   Mechanics of trading refined products; managing a corporate position; price reporting; brokers; chartering a vessel; calculating freight costs using Worldscale; costing and evaluating alternatives.

Day 2   Risks in trading; principles of price risk management; trading and hedging with futures; crude oil trading and pricing; trading Brent and Dubai; hedging with forward markets; negotiating a contract.

Day 3   Swaps markets; tendering; refined products trading and pricing; EFPs; comparison of hedging instruments.

Day 4   Hedging with over the counter instruments; introduction to options; performance and credit management; the role of documents; calculating profits and losses on deals.

Day 5   Legal aspects of oil trading contracts; summary of best trading practice.

What will you learn?

By the end of the course you will be able to:

  • Minimise the operational and counterparty risks
  • Negotiate, cost and compare deals, directly and through a broker
  • Write a contract for the purchase and sale of crude oil and refined products
  • Calculate freight costs using Worldscale and charter a ship
  • Trade futures and forward markets for hedging and price risk management
  • Calculate the profitability of deals
  • Manage a corporate position
  • Prepare and evaluate a tender 

You will understand: 

  • How prices on the international free markets are established and what influences the markets
  • Crude oil pricing and trading
  • Refined product pricing and trading
  • How OTC markets trade
  • The legal aspects of trading and contracts
  • Oil trade finance and documentation

Who should attend?

Anyone whose work is affected by changes in the international oil price including those in:

  • Supply, trading, risk management, refining, finance, transportation, E&P in the oil industry
  • Oil trading and distribution companies
  • Energy-related government departments
  • Purchasing, planning and finance in major energy consumers
  • Energy publications
  • Banks, accountants, auditors and others associated with oil companies and oil financing