Crude Oil Trader Program - Classroom

ICE Education and TwoTwoFive bring together their physical and derivative Crude Oil markets expertise, to deliver an immersive and interactive learning experience.

Delivered 3 days, the trading concepts will be decoded in a bite-sized manner to reveal the key methodologies and intricacies behind them.

In addition, you will be able to practice what you have learnt by playing realistic trading scenarios via a unique trading simulator allowing you to experience the psychological challenges a trader has to endure daily.

Course Information

Price £2,995 + VAT
Duration 3 days
Location London
Available Dates

Who Should Attend

  • If your work is affected by the changes to the international price of oil
  • oil industry staff working supply, trading risk management, refining, finance, transportation and E&P
  • Oil trading and distribution companies
  • Energy-related government departments
  • Purchasing, planning and finance departments in major energy consumers
  • Energy publications
  • Bankers, accountants, auditors and others associated with oil companies and oil financing.

Booking Information

Tel: +44 (0) 20 7065 7706

Course Content

Day 1:

- Derivatives:

What is trading and why do companies trade. Explains some trading terminology. What is a crude oil derivative? What is the difference between forwards, futures, swaps, and options are? How they are connected, EFP, EFS. How a futures exchange works. How traders use crude oil.

Simulations: Up to 3 trading simulations where delegates will be able to trade futures, swaps, and forwards.

- Trading Best Practice:

What is risk. The different types of risk - price, credit, operational, reputational. How risk can be managed successfully by a trader. Technical analysis. How risk is measured, what is VAR and how is it used. Trading lessons - common pitfalls.

Simulations: 2 trading simulations where delegates will be able to trade Brent futures within a VAR trading limit.

Day 2:

- Time Spreads:

What is spread trading/different types of spread. Principles of spread trading. What a forward curve is and market structure. Different types of market structure and what they signify. How traders use time spreads.

Simulations: 2 trading simulations where delegates will be able to trade Brent and WTI futures within a VAR trading limit

- Cargo Price Exposures:

What is physical cargo trading. Physical delivery terms. Factors that influence supply/demand. Crude oil quality. Contractual considerations. Price reporting agencies - who are they and what they do. Explains floating prices and benchmark prices. What is crude oil differential trading?

Simulations: 2 trading simulations where delegates will be able to trade North Sea and West African physical crude oil cargoes

Day 3:

- Arbitrage:

Explains physical arbitrage. Different aspects of crude oil. Voyage chartering/Time charter. Bareboat charter. Contract of affreightment. Worldscale - what it is and how it works. Operational costs of arbitrage. Financial risks. When traders arbitrage. Netback calculation

Simulations: 2 trading simulations where delegates will be able to trade American, North Sea and Middle Eastern physical crude oil cargoes, charter vessels and manage price risk exposures

- Hedging:

Why hedge. Basis risk. Swaps as hedging instruments. Types of hedging. A detailed example of hedging fixed price/floating price cargoes. Operational impact on pricing.

Simulations: Up to 3 trading simulations where delegates will be able to apply arbitrage and unwinding hedges and charter vessels as physical cargoes price in/out

- Storage:

What is storage/why store oil. The costs/benefits associated with storing oil. When traders store oil. Types of market structure. How to hedge a storage play. Intrinsic and Extrinsic Value.

Simulations: 2 trading simulations where delegates will be able to store American and European crude oil cargoes and apply hedges to capture the storage play

- Team Dynamics:

How to extract value from a physical crude oil portfolio. Why speedy evaluation of opportunities is critical. Why teamwork is important. Applying all the trading concepts learnt across a portfolio. Understanding the value of tenders.

Simulations: Working as a team, the delegates will apply all the trading concepts across a portfolio of crude oil cargoes, trading spot cargoes, entering tenders, hedging, arbitrage, seeking storage opportunities and speculatively trading the futures markets with flat price and spreads positions.