Skip to content Skip to navigation

Hedging and Management of Energy Price Risk

Curriculum

Oil Markets, Supply Chains & Risk Management

  • Risk management: art or science?
  • Behaviours & biases
  • The VULCA effect
  • Market structures & price discovery

What Is Hedging?

  • The two dimensions: protection & opportunity
  • Hedging vs insurance
  • Hedging in oil supply chains
  • Producers: sell side hedging
  • Refiners: margin hedging
  • Consumers: buy side hedging
Oil Prices, Benchmarks & Hedging
  • Spot markets & price benchmarks
  • Oil price sources & methodologies
  • Trouble with the Curve & forward values
  • Flat price, spreads & basis risk

Oil Price Hedging Strategies

  • Futures, forwards, swaps & options
  • BFOE & Singapore MOC window
  • Hedging with EFP, EFS, CFD & DFL
  • Hedging strategies in practice
  • Supply chains & price discovery
  • Mark-to-Market & Value-at-Risk

Hedging in Contango Market Structure

  • Locking in forward premia
  • Contango carry & space arbitrage
  • Optimal hedging strategies
  • Cost factors: the 4D’s and 5I’s

Paper vs. Physical Contracts for Oil

  • Counterparty risks
  • OTC swaps & trade clearing
  • Lesson in history: risk management limits
  • Errors, misquotes & disputes
  • Physical & paper pitfalls
  • Risk breakdowns

Market on Close (MOC) Window

  • Real time trading, pricing & hedging
  • Calculating MOPS values & strips
  • Backwardation & supply squeezes
  • Simulated MOC Window trade

Trends & Outlook

  • Use of technology to manage VULCA
  • Structural changes & implications
  • CTRM platforms and solutions
  • Impacts of trade regulations & government oversight
  • Key takeaways

Last updated on 28 Mar 2018 .