TRAINING MANAGING FINANCIAL RISK IN OIL & GAS TRADING

COURSE OVERVIEW

The interactions of price, supply, and demand make up the essence of what can cause market risk in the physical side of an oil company or trading organization. The skill and consistency of the traders is the key factor in helping manage this type of risk.Traders use two approaches to develop these skills and monitor the rapidly changing markets.  The first is what is called fundamental analysis for crude oil and products.  Often this technique, though important, is not dynamic enough for day-to-day decision making. Here traders use another way of looking at price volatility, called technical analysis. The core of technical analysis is developing charts, because it assumes that price movements form patterns that are repeated over time. A key premise is that the market has responded to all possible influences by the time it has signaled the response through price.

OBJECTIVES

• Identify and quantify exposure across market risk, credit risk, liquidity risk, and operational risk in physical and paper energy trading.
• Apply financial instruments—such as futures, options, swaps, and spread trades—to lock in margins and mitigate price fluctuations.
• Calculate and interpret key risk management metrics, including Value at Risk (VaR), Stress Testing, Scenario Analysis, and Mark-to-Market (MTM) accounting.
• Assess counterparty creditworthiness, set exposure limits, and structure credit support agreements (CSAs) and margin calls effectively.
• Build strong middle-office risk frameworks, enforce limit compliance, and avoid rogue trading or policy breaches.
• Evaluate global oil and gas pricing benchmarks (Brent, WTI, JKM, Henry Hub), crack spreads, and physical supply chain dynamics.

COURSE OUTLINE

1.  Overview Oil & Gas Market

2. Oil & Gas Pricing

3. Risk Management

4. Oil Supply And Trading Business Risk Management Strategies

5. Setting Hedging Risk Limit

6. Hedging Case Study

RECOMMENDED AUDIENCE

• Energy & Commodity Traders
• Risk Managers & Risk Analysts
• Treasury & Finance Managers
• Commercial & Supply Chain Executives
• Trade Settlement & Back-Office Staff