PRO - Oil Price Risk Management


Course Dates: 16th - 18th November 2016

Thomson Reuters - London, UK

Course fees:  UK Pounds £2,600 plus VAT*where applicable

As a member of a trading team, you learn to identify and manage  exposure to price risk. You'll trade the full range of derivative markets, including the live futures markets through online screen services. You'll also work with simulation software to learn about using options.

Delegates compare the performance of different instruments over time and changing market conditions and learn how to choose the appropriate instrument to match their objectives.

The course explains the workings of futures, forwards, swaps and options markets and how they can be used for hedging and price management purposes.

The costs and relative benefits of the instruments and the implementation of a risk management strategy are explored as well as technical analysis and the principles of management control.

Exercises are performed in syndicates, with comprehensive debriefs to study the consequences of the decision made.p>

Course Timetable

Day 1   Introduction to exposure; futures markets; hedging with futures; quantifying exposure; spread trading and the forward curve; swaps, hedging exercise.

Day 2   Exposure debrief; crude forward markets and Brent; hedging refinery margin; differential swaps including CFD's and DFL's; hedging efficiency; introduction to options; options strategies; regulation and clearing

Day 3   EFP's and excercise; EFS triggers; optionality in oil trading; structured instruments; hedge decision process; comparison of hedging strategies and debrief; management and control.

What will you learn?

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

  • Identify price exposure in your company's activities
  • Analyse price charts
  • Trade futures, forward and swaps markets
  • Hedge cargoes and longer term positions using forwards, futures, swaps and options
  • Manage refinery margin risk
  • Use contracts for difference (CFDs) to manage contango/backwardation risk in the dated/paper Brent markets
  • Separate price and supply and maintain control over pricing using EFPs and triggers
  • Examine and compare the cost and effectiveness of different options strategies 

You will understand:

  • The forces driving the physical, forward, futures and other derivative (swaps and options) markets
  • The mechanisms of trading on the forward markets and the associated risks and rewards
  • Option theory and factors determining prices
  • The need for management control systems
  • The role of the market makers and operation of the over-the-counter market.

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