OIL TRADER ACADEMY

IC E Educ ation and I BH have com bined t heir

expertise to provide an innovative a nd
p ractic al progra m m e covering all aspe c t s of
t he physic a l c rude oil, produc ts a nd tra d ed
d e rivatives m a rket through our m arket lea d ing
O i l Trader Ac a demy.
With the global oil markets being subject to extreme volatility and change
due to a series of geopolitical events, this is the ideal time and opportunity
to understand the drivers of oil price movements and tools at your disposal to
protect against and trade around your organisations market position.

This programme will appeal to: oil and product traders, refiners, economists,
analysts portfolio managers, risk managers, operations managers, brokers and
other related front, middle and back office staff.

As an outcome from the course you will:

• Review crude oil supply, demand and products
• Understand crude oil refining, evaluation and selection
• Explore physical and derivative oil markets, shipping and contracts
• Appreciate pricing formation, trading and price risk management
• Learn about futures, swaps, options and over- the-counter markets
• Become familiar with trading techniques and terminology
• Participate in trading and hedging simulation exercises and improve negotiation skills

FULL 2-WEEK PROGRAMME

OR ATTEND ONE OF THE LONDON
WEEK LONG MODULES
Module 1: Physical Crude & Products Trading
Date: 14 - 18 August

Module 2: Advanced Trading & Price Risk Management

Date: 20 - 24 August

Where: ICE Futures Europe, London

Standard Rate* Pre 31 May Rate*

One module: £3,995 + vat One module: £3,595 + vat
Full course: £6,995 + vat Full course: £6,295 + vat
Multi Booking discounts – 10% for 2 delegates and 15% for 3+ delegates**

* Price includes a theatre night during each module. These fees do not include accommodation, but
inclusive packages are available. See page 6 for details.
** For same company bookings when booked at the same time
 OIL TRADER ACADEMY

TRAINER BIOGRAPHIES the title of Distinguished Professor. In ventures/joint operating agreements

October 2009 he started co-operation and negotiation.
Trevor Christmas with the Singapore Management
Trevor Christmas has 30 years University’ International Trading Institute Julian Lee
experience in the energy industry with (SMU ITI) as a visiting Executive Faculty Julian Lee is Senior Energy Analyst at
BP, and more recently, with the IPE. At BP, member and as a Research Fellow. the Centre for Global Energy Studies.
he held senior management positions in Tom is a regular commentator on BBC Mr Lee joined the Centre for Global
London, Asia and the Americas mainly World, CNBC, and Bloomberg television Energy Studies at its creation in 1989.
in trading and downstream. At the IPE, on topics related to international energy He specialises in global oil market
he was responsible for the Exchange’s and emissions market related issues. analysis and the oil industries of the
marketing services worldwide in oil, gas former Soviet Union and sub-Saharan
and electricity. John Fry Africa, overseeing all the CGES’ work
John Fry has worked in the energy in these latter areas. Mr Lee has written
David Richards markets since 1986 when he joined Man extensively on many aspects of the oil
David Richards has over 30 years International as a broker on the oil desk. industry of the former Soviet Union,
experience in the international oil and He specialised in futures and options including the production prospects for
natural gas business with the BP Group. and qualified as a trader in the IPE both Russia and the Caspian region, the
He gained a breadth of experience in option pit. He executed the first principal export options for oil and gas producers
senior management positions within OTC oil deals for Man and became head in both regions and the dynamics of
the downstream marketing business of the energy desk in London. John and prospects for Russian oil demand.
in the UK, Europe and South Africa, moved over to the OTC energy market Mr Lee is a frequent commentator
involving Directorships in a number of in 1997 and worked for Koch Petroleum on global oil markets and on the oil
BP subsidiaries. Group helping to develop their energy industry in the former Soviet Union and
derivatives business. the proposed export projects of Russia
Tom James and the Caspian countries. Julian Lee
Professor Tom James has built up 20 Ken Mildwaters is a graduate in Mathematics from the
years of practical expertise in the Energy, Ken Mildwaters read jurisprudence University of Warwick and received his
Emissions and International Commodity (B.Juris. (Hons)) and law (LL.B) at the Master Degree in Operational Research
markets. His broad experience covers University of Western Australia, Australia from the London School of Economics.
investment and trading with a particular and law (Ph.D.) at the Centre for Energy,
focus on Asian, Central Asian, and Middle Petroleum and Mineral Law and Policy IN-HOUSE TRAINING
East Markets. His career has spanned at the University of Dundee, Scotland. In-house training can present an
the complete value and business Ken Mildwaters has been a partner at efficient, cost effective and targeted
process chain and through this he has the London office of global law firm way to ensure that your people are
built up a holistic understanding of the Morgan Lewis & Bockius, and of-counsel equipped with the knowledge and
key elements of investment, trading for another global firm, Milbank, Tweed, skills to meet your business objectives
and risk management decision making. Hadley & McCloy, focusing on corporate, and customer requirements. It can save
In 2003 he published his first book commercial and natural resources law. time and money. We can come to you
offering practical guidance to corporate He founded and managed law practices to provide this training in your own
managers and new traders in the energy on behalf of a joint venture of law location. Training can be arranged for
and commodity sector and since then firms Dewey Ballantine and Theodore small groups or entire divisions and
has published three more books and Goddard, in the Czech Republic, will take place at a time chosen by
contributed to two others, including Hungary and Poland. Dr Mildwaters and convenient to you. If you would
Energy Markets (Wiley Finance 2008), has presented numerous papers and like to discuss possible co-operation
Energy & Emissions Markets (Wiley conducted workshops in the fields of in developing in-house training please
Finance 2006). Since 2006 he has held natural resources law, joint ventures and contact:
the Chair Professorship for LNG business joint operating agreement, negotiation
at the University of Petroleum & Energy skills and managing in-house legal Neil Scurlock
Studies, and in November 2008 for his functions. His academic interests lie in Head of Training
contribution to written knowledge in the intersection of law and business, T: +44 (0)20 7065 7707
the Energy Trading field was awarded where he has concentrated on joint E: [email protected]
 OIL TRADER ACADEMY

MODULE 1: DAY 1 - PHYSICAL CRUDE OIL & PRODUCTS TRADING

MODULE 1: DAY 1 • Delivery Terms

General Introduction • Price and Pricing Formula
• Administration and delegate introduction • Shipping Procedure
• Course Overview • Payment
Supply and Demand Fundamentals and Implications • Legal Aspects
• Evolution of oil demand and supply – text and email contracts
• Current oil reserves and production – bills of lading, letters of credit, letters of indemnity,
• Oil supply/demand and implications for trade performance bonds
Crude Evaluation and Selection – nomination
• Crude classification and assay – laytime and demurrage
• Gross Product Worth – certificates of quantity, quality and originality
• Worldscale (Freight costs) • Taxes, charges and expenses
• Net margin and crude selection • Warranties
Refining & Trading Simulation (Round 1) – free of encumbrances, right to transfer
• General introduction • Dispute Resolution
• Physical (wet) crude trading • Lifting and Balancing Agreements
• GPW and best crude
Physical Markets & Pricing MODULE 1: DAY 3
• Crude Oil Physical oil markets Dated Brent and The 25 Day BFOE Market & Other
• Pricing mechanisms benchmarks
• Introduction to the terms
MODULE 1: DAY 2 - CONTRACTS • Role as a benchmark
• The Players • Why Brent - The Brent forward contract
• Crude Oil Market Structure • Brent lifting programme
• Long-Term Contracts • Linking of the 25 day BFOE & Dated Brent markets
– issues with change of circumstances • WTI
• Spot Market Contracts • Dubai
– characteristics of the market
– areas of markets Hedging Instruments - Forward & Futures
– standard terms • Pricing exposure/keeping an exposure book
• FOB Crude Oil Contracts • Evolution of the market
– free on board • Crude oil forward markets
– duties of seller and buyer • Review of futures contracts & terminology
– passing of property • Basic Hedging example using futures
• CIF Crude Oil Contracts • Basis risk/opportunity and forward curve
– cost, insurance and freight, variations, out-turn clause
– terms relating to deliver on arrival Refining & Trading Simulation (Round 2)
– duties of seller and buyer • Crude hedging with futures/Basic risk
– the goods, quantity and quality • Hedging strategy and position management
– shipment period and place, appropriation, shipping • Refinery nominations (crude type and mode of operation
documents, tender of documents, passing of property
 OIL TRADER ACADEMY

MODULE 1: DAY 1 - PHYSICAL CRUDE OIL & PRODUCTS TRADING

Market Reporting and Price Assessment - Platts MODULE 1: DAY 5

• What is Platts? International Product Trade Flows and Transport
• Market needs • Differences between Products & Crude
• Scope of crude and product reporting • The main product markets
• Price assessments and confirmation • Product price drivers
• Product price differentials
MODULE 1: DAY 4 • Refining Balance
Refinery Products & Processes • Fundamentals of the various product markets
• The main products - Power Market
• Refinery configurations - Bunker Market
• Deep residue conversion - Atmospheric Residue market
• How refiners influence yield variations • Importance of Refining Margins
• Alternative & Renewable Fuels • Freight
• Changing crude slate • Arbitrage & Trade
• Transport Fuel Quality & Emissions • Role of Traders/Blenders
• Regional Demand & Margin trends • International arbitrage
• Blending & giveaway
Freight Choice and CIF Contract Exercise
Swaps
• Swaps terminology and principles Intro Refining & Trading Simulation Briefing (Round 4)
• Examples of crude oil and product swaps
• Swaps settlement and pay-out Refining & Trading Simulation (Round 4)
• Contracts for difference/ Brent CFD market Teams
• Arbitrage
Intro Refining & Trading Simulation (Round 3) • Product sale CIF & FOB
• Product Sales FOB • Profitability & Mark to Market
• Gas oil futures and mogas swaps • Week 5 sales
• Developing a trading strategy
Trading strategies
Refining & Trading Simulation (Round 3) • Back to Back
• Product Sales FOB • Long & Short
• Gas oil futures and mogas swaps • Cornering
• Developing a trading strategy • Fundamental Analysis
• Technical Analysis
Freight & Shipping • Trading off a term contract
• Shipping & Chartering • Spread trading & Cfd’s
• Chartering a ship • Controlling risks
• Tanker Market Supply & Demand
• Operations & risks Simulation Results
• Chartering exercise handout Summarising Comments/Delegates depart
 OIL TRADER ACADEMY

MODULE 2: ADVANCED TRADING & PRICE RISK MANAGEMENT

MODULE 2: DAY 1 • Analysing Oil price behaviour to aid decision making and
Fundamentals of oil and gas timing around physical inventory and or hedging and lifting
Basic principles windows
• Upstream marginal and average costs
• Capital intensity Advanced Analysis and interpretation of Oil Price Behavior
• Exploration and Production • Overview of oil price behavior
• Crude oil characteristics • Forward curve analysis for European Oil markets
• Refining • Recap of key benchmarks
• Oil industry structure • Technicals Analysis of oil futures benchmarks
• Oil price volatility • Analysis techniques for Platts Physical market data
• AV numbers and Pivot Points (CACT)
The geography of oil and gas • Key fundamental analysis factors and tools
• News and information tools to aid timing of trading
Oil demand decisions
• Global demand growth
• Shifting balances between OECD and Non-OECD Analysis Scenarios
• The changing balance of products
Application in case studies of Analysis Tools
Oil Production
• Major producing regions MODULE 2: DAY 3
• Production trends Crude Oil Markets and Instruments: Physical and Financial
Trading
Oil trade • Forwards, swaps, exotic swaps (extendable, double-up),
• Major oil trade flows basis swaps, options, Asian options, EFPs

OPEC Refined Products Markets And Instruments: Physical and

• The role of OPEC Financial Trading
• Trading ‘crack spreads’, refineries as ‘derivatives’
Modelling the oil market • Forwards, swaps, basis swaps, options, strips of options,
• Why do we want to model the oil market? Asian options, crack spread options
• Modelling demand
• Oil price determination Weather, Freight And Emissions Markets - Their Impact On
• Oil inventories Oil Markets
• Temperature measures: cooling degree days and heating
Oil market outlook degree days
• What drove oil prices to $150/bbl in 2008 - Futures or • Hybrid products based on weather and other underlying
fundamentals? assets
• What stopped the collapse early in 2009? • Emissions markets
• What is driving the price rebound? • Freight routes and markets
• Where will oil prices go from here? Types of strategies and approaches
• Is oil price stability possible? • Strategy case studies: ICE Brent vs ICE WTI
• Strategy case studies: Urals vs Brent
MODULE 2: DAY 2 • Strategy case studies: Brent vs Dubai
Structure of Course
 OIL TRADER ACADEMY

MODULE 2: ADVANCED TRADING & PRICE RISK MANAGEMENT

Hedging to Save Money • Evaluating the use of derivatives to control market risk and
linking use toenity-wide and activity-level objectives (the
Strategy Workshop: End User, Producer, Utility, Physical risk matrix)
trader scenarios • Defining risk management activities and terms
• Case Study: Freight rate trading and hedging
Designing Policies and Procedures Around Market Risk,
Options & Risk Management Approaches Credit Risk And Operational Risks
• Using energy options: hedging & speculation • Communicating and enforcing the policies
• Review of option types
• Understanding option payoffs, hedge financing risk Risk Management
management • Understanding and interpreting ‘at-risk’ measures, VaR
• Overview of methodologies: Analytic, Monte Carlo and
MODULE 2: DAY 4 historical simulation
Trading Laboratory • Enchancing exposure reports with risk analysis
• Managing the Trading Emotions
• Trader mindsets Stress Tests In Energy Markets
• Trading plans and removing the emotional factor • Stress tests as a complementary tool to VaR and other
• Taking a loss - Taking a profit market risk measures
• Communication skills - Case studies selecting appropriate Stress Tests for various
• Market conspiracy - you versus the market scenarios
- Case studies working through possible stress tests for
Trading Room Practicals & Scenario Based Trading Games your organisation
• Each delegate will have a system set-up for the oil markets • Types of stress tests and main applications
and will execute both OTC and futures market orders • Integrating liquidity, credit and operational risk in the formal
reacting to real-time scenarios presented using a PC Based risk management process
trading simulation exercises
Value at Risk Measurement
MODULE 2: DAY 5 • Running of VAR risk simulation using online Value at Risk
Strategic and Tactical Issues Around Hedging with Energy system. (Hyper-Rig and Aspect)
Derivatives • Case study to calculate operating the correct inputs and
• Understanding operations and entity-wide objectives output parameters
• Evaluating the impact of indication vs hedging. Payoffs • Risk Report design and formats
under different scenarios

HOTEL PACKAGE FEES

• 12 nights (from 13-25 August) - £2,042 + VAT
• 6 nights (either from 13-19 August or from 19-25 August) - £1,121 + VAT

THE FEE COVERS

• Hotel accommodation at 5* Grange St. Pauls Hotel
• Full English breakfasts
• Transfers from/to an airport
• Daily transfers from the Hotel to ICE Futures and from ICE Futures back to the Hotel
 OIL TRADER ACADEMY

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To book please contact ICE Education on:
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Email [email protected]
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