Course dates
The course includes:
- Overview of crude oil demand and supply
- Who are the key players in the crude oil market
- Analysis of typical crude oil qualities by region
- Overview of the main crude oil trade flows
- Introduction to refining processes
- The relationship between crude oil and oil product prices
- Crude oil chemistry and oil specifications
- Reading a crude oil assay
- Calculation of crude oil yields and netbacks
- Calculating of Gross Product Worth and refining margins
- How refiners value base load and opportunity crudes
- Overview of the spot market and the term contract market
- The use of pricing benchmarks: past, present and future
- How the pricing agencies operate
- Contractual arrangements in trading of physical oil
- How crude oil is transported
- The crude oil derivatives markets
- Relationship between physical and derivatives markets
- Hedging and basis risk
- Sources of price data
- Regulatory Issues and Taxation
Course overview
This is a three day course covering everything your team needs to know about how oil is traded and priced in the international market. The course covers the valuation and pricing of physical cargoes of crude oil, as well as how derivatives such as oil futures and swaps are structured.
Who should attend
- Banks with a presence in the commodities markets
- Swaps sales and marketing staff
- Regulatory and taxation authorities
- Oil refiners including planning and scheduling executives
- Marketing executives at National Oil Companies
- Independent exploration companies
- Oil and commodities traders
- Business development staff at futures exchanges
- Fund managers
- Private equity executives
- Lawyers/accountants/insurers needing to understand oil valuation
Day 1
Overview
- Geographical Distribution of Crude Oil Reserves and Production
- Key area of production and consumption
- Major tradeflows
- Current trends in the crude oil trading markets
- Future crude oil markets; availability long-term price trends and 'Peak Oil' considerations
Crude Oil Characteristics
- Physical and chemical properties; gravity, sulfur content
- Short and long-term price-drivers
- Crude oil classification and trading benchmarks
The Refining process
- Pre-treatment; crude de-salting and removal of other
- impurities
- The crude distillation unit and fractionation, vacuum
- distillation
- Typical product yields from various crudes
- Refinery configurations to optimise product yield
- Reforming, cracking, coking and deep conversion
- Hydrotreating and desulfurisation
Refinery Economics
- Gross and net refining margins
- Inputs; fixed and variable costs, crude prices
- Refinery key performance indicators
- Margins, crack spreads and gross product worth
Exercise: Delegates calculate gross product worth for an array of crude oils with supplied refined product prices
Refinery Management Challenges and Trends
- Matching yield to product market demand
- Supply logistics and storage considerations
- Linear planning
Day 2
The Crude Oil Trading Markets
- The history and evolution of today's trading markets
- Physical and derivative trading markets
- Term and spot contracts
- Spot prices and their importance in the price formation in physical and derivative contracts
The Crude Oil Sales Contract
- Key terms and conditions
- INCOTERMS
- Case study examples
The Crude Oil Transportation
- Marine tankers and WORLDSCALE rates
- Pipeline transportation and tariffs
- Storage and inventory
- Price netbacks
Exercise: Delegates develop a solution for the transport options for Middle East crude oil purchases for a U.S. gulf coast refinery
The Derivative Markets
- Forwards, futures, swaps and options
- Case studies; hedging programmes designed to mitigate future price risk
The Forward Price curve
- Backwardation and contango
- Case studies from 1990s and the 2000s
Day 3
Global Crude oil Benchmarks
- Brent, WTI, Urals, Dubai, Tapis etc.
- Interrelationships; premiums and differentials
- Benchmark spot prices and price-setting
- Aribtrage
Trading Characteristics
- Price volatility
- Refinery demand: the light/heavy differential
- Seasonal trends: "driving seasons, "heating seasons"
Price Reporting
- Platts and Argus
- Importance of validity of price analysis
Key Commodity Exchanges
- NYMEX, ICE, SMX, DME
- The players; Intermediaries, Banks, Traders, Brokers, Hedgers and Speculators
- Future Price Trends
Exercise: Delegates write forward contracts forsettlement in December 2012
Legislation
- United States
- CTFC- Dodd-Frank Act
- EU
- ACER, EMSA
Wrap-up and Takeaways
- Summary and key messages
- Discussion
Central London Hotel (energy), London, UK
All Euromoney Energy Training courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.
Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.
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William Pyke
Bill Pyke has over 37 years of experience in the international oil and gas business. He has had experience of sales agreements dating back to the early 1970s with ‘life-of-field’ gas sales contracts to the U.K.’s then monopoly gas utility; BGC.
For over 26 years he worked for North American oil companies including ARCO, Marathon and Talisman on operations in Europe, Africa and the Middle East.
Since late 1998 Bill has been an independent oil and gas consultant. Assignments have included projects with a wide range of clients involved in the oil industry. Latterly, he has been involved in sales agreements covering crude, natural gas and refined product sales on behalf of oil company clients.
In 2009 he was a key consultant on a European Commission study into the competitive aspects of crude oil and product markets in the EU-27 member states.
He is also actively involved in delivering training and development programmes to delegates actively involved within the oil industry. He is a fellow of the Energy Institute, London.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
19-22 Jun 2012 (London, UK)
4-7 Dec 2012 (London, UK)
This Euromoney Energy Training course examines markets, pricing and products to provide you with a thorough overview of the sector. The course will explore mechanisms and tools for both physical and financial oil trading allowing unparalleled access to the world of trading, its role within the oil industry and its importance in the success of oil companies. You will leave this course with a thorough understanding of the workings of crude oil markets and the range of contracts, tools and techniques available to traders.
25-27 Jun 2012 (London, UK)
17-19 Dec 2012 (London, UK)
This Petroleum Company Performance Management training course has been designed to offer personnel from corporations and financial institutions a full complement of tools to use most effectively in developing and analysing the corporate performance measures for oil and gas companies.
18-20 Jul 2012 (New York, United States)
This course will give you an in-depth introduction to petroleum refining technology and economics. The focus is on transportation fuels refineries, however, petrochemical production and biofuels are also discussed. The first part of the program includes an
overview of crude oil supply and petroleum product demand. This is followed with a description of refinery process technology. Key refining technologies are described such as crude oil distillation, heavy oil conversion options, hydrotreating, and catalytic reforming.
5-8 Nov 2012 (Hong Kong, Hong Kong)
4 days of course modules that focus on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves trading, refining, petrochemicals and final distribution to the consuming markets.
20-22 Aug 2012 (Hong Kong, Hong Kong)
This course is designed for professionals who need to develop an understanding of the unique aspects of the energy industry, including the oil and gas commercialisation and business development or facilities evaluation and commercialisation.
The course will focus on the skills required in evaluation (both buyside and sell-side), financing, acquisition, and exploitation planning for an oil and gas entity, a midstream facility or electrical generation plant.
25-27 Sep 2012 (Singapore, Singapore)
This Fundamentals of Crude Oil Valuation & Pricing course covers everything you need to know about how oil is traded and priced in the international market. The course covers the valuation and pricing of physical cargoes of crude oil, as well as how derivatives such as oil futures and swaps are structured.
25-29 Jun 2012 (London, UK)
Featuring 3–individually bookable modules:
- Upstream development & production
- Mid-stream pipelines & LNG projects
- Downstream oil refineries & petrochemical plants
- Including: 16 key industry case studies to improve your understanding
20-22 Aug 2012 (London, UK)
22-31 Oct 2012 (Hong Kong, Hong Kong)
17-21 Sep 2012 (London, UK)
This 5-day course is designed to introduce both lawyers and nonlawyers alike to the theories and practice of international commercial and investment arbitration in the oil & gas industry.
24-27 Sep 2012 (London, UK)
15-18 Apr 2013 (London, UK)
The Commercial and Trading Aspects of Oil Refining course will provide you with in-depth knowledge of the refining business and an understanding of how trading/hedging can improve margins and reduce risk. Discover how to optimise refinery margins and manage the profitability of commercial refining.
20-24 Aug 2012 (London, UK)
This Euromoney Energy Training course provides a comprehensive overview of the oil and gas industry from upstream exploration and production to downstream refining, sales and marketing. You will gain an appreciation of industry dynamics and the key issues affecting its development and future. This course will provide a thorough foundation for understanding the changing industry dynamics.
8-10 May 2013 (London, UK)
This course will investigate the mechanisms for trading physical oil, freight, shipping and derivatives to optimise margins and achieve profit targets. The interdependence between oil markets and ship chartering will be extensively explored, revealing links to the derivative markets and the use of trading tools.
17-19 Oct 2012 (London, UK)
13-15 Feb 2013 (London, UK)
This Euromoney Energy Training course provides a comprehensive overview of the oil and gas industry from upstream exploration and production to downstream refining, sales and marketing. Under the guidance of our expert course faculty, participants will gain an appreciation of industry dynamics and the key issues affecting its development and future.
8-10 May 2013 (London, UK)
This course will investigate the mechanisms for trading physical oil, freight, shipping and derivatives to optimise margins and achieve profit targets. The interdependence between oil markets and ship chartering will be extensively explored, revealing links to the derivative markets and the use of trading tools.
17-20 Dec 2012 (Dubai, United Arab Emirates)
This 4 day International Oil & Gas Contracts course is specifically designed for professionals involved internationally in the oil and gas industry, it offers a unique opportunity to rapidly increase your understanding of the legal issues involved in various UK and international scenarios and to improve your techniques and skills in drafting a variety of international contracts.
3-5 Dec 2012 (London, United Kingdom)
Euromoney Energy Trainings Petroleum Sales Contracts course is designed to give attendees a comprehensive understanding of crude oil, natural gas and refined products markets and the sales contracts that are utilised for transactions through the supply chain.
29-31 Oct 2012 (London, UK)
This course is designed for professionals who need to develop an understanding of the unique aspects of the energy industry, including the oil and gas commercialisation and business development or facilities evaluation and commercialisation.
The course will focus on the skills required in evaluation (both buyside and sell-side), financing, acquisition, and exploitation planning for an oil and gas entity, a midstream facility or electrical generation plant.
11-15 Jun 2012 (Singapore, Singapore)
A 5-day course designed to provide participants with in-depth knowledge of oil products, oil trading, market participants and fundamentals such as pricing.
17-19 Sep 2012 (London, UK)
19-21 Nov 2012 (Singapore, Singapore)
16-19 Jul 2012 (London, UK)
4 days of course modules that focus on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves trading, refining, petrochemicals and final distribution to the consuming markets.
Course dates