Hedging & Management of Energy Price Risk
- Finance & Investment
This module is conducted in-person.
3 Full Days (Weekdays)
Who Should Attend
This workshop is highly recommended for professionals that are engaged in marketing, trading, financing and risk management of energy trading:
- Energy traders keen to learn about risk management and hedging of energy prices
- Corporate treasurers, finance directors in energy trading
- Relationship managers, corporate bankers who advise energy trading companies
- Trade finance specialists involved in the financing of oil trade
- Professionals in the middle and back office of banks and corporations, in functions such as credit, risk, audit and operations, who are responsible for risk management of energy trades
Overview
In the wake of 2020’s violent, historic oil price plunge and the ensuing period of hyper volatility and disruption, market participants and investors face even greater potential losses. What happens when oil prices go negative? How are risks assessed and managed? Given the complexity of energy supply chains and derivatives, professionals involved in physical trading, operations, and financing must access and process key market data and intelligence to optimally manage risk exposures and ensure cash flow and profitability.
This intensive 3-day workshop provides battle-tested, practical approaches to identifying, managing and hedging energy prices risks in real life situations. Participants will analyse various cases involving producers, refiners, consumers and traders and also engage in interactive team-based negotiations and simulations to gain hands-on experience.
Learning Objectives
- Understand market dynamics and the interplay between physical and paper trading
- Evaluate different hedging tools for price protection and scenario optimisation
- Distinguish between various types of price risk management and hedging strategies
- Develop keener senses of risk management constraints and pitfalls in contracts and trading
- Gain market insights through case studies, negotiation and simulations exercises
Topic/Structure
Oil Markets, Supply Chains and Risk Management
- Risk management: art or science?
- Behaviours & biases
- VULCAN effects
- Market structure & price discovery
What is Hedging?
- Dual Dimensions: protection & opportunity
- Hedging in oil supply chains
- Producers: sell side hedging
- Refiners: margin hedging
- Consumers: buy side hedging
- Bankers, traders, funds: liquidity providers
Oil Prices, Benchmarks & Hedging
- Spot markets & price benchmarks
- Price reporting agencies (PRAs) & methodologies
- Trouble with the curve & forward values
- Flat price, spreads & basis risk
Oil Price Hedging Tools
- Futures, forward, swaps & options
- BFOET & Market on Close (MOC) window
- Hedging with EFP, EFS, CFD and DFL
- Suboptimal fits: constraints and variables
- Deploying the Hedging Checklist
Arbitrage and Optimisation
- Hedging in contango markets
- Contango carry and time arbitrage
- Location and space arbitrage
- Cost factors: The 4D’s and the 5I’s
Paper vs Physical Contracts
- Counterparty, trade finance and performance risk
- Futures, OTC swaps and trade clearing
- Plugging the gaps in physical contracts
- Physical and paper trading pitfalls
- Famous Risk Bust-ups and Rogue Traders
Market on Close (MOC) Window
- Real time trading, pricing & hedging
- Calculations MOPS values and strips
- Backwardation, trader distortion and squeezes
- Reconstructed MOC Window trading
Trends & Outlook
- Monitor, Measure and Manage: internal control and reporting
- Technology: digitisation of trading and risk management
- Risk Tracking: MTM, VaR, stress and back testing
- CTRM platforms and solutions
- Impacts of regulation & government oversight: banks, PRAs
Assessment
As part of the requirement for SkillsFuture Singapore, there will be an assessment conducted at the end of the course. The mode of assessment, which is up to the trainer’s discretion, may be an online quiz, a presentation or based on classroom exercises.
Participants are required to attain a minimum of 75% attendance and pass the associated assessment in order to receive a digital Certificate of Completion issued by Singapore Management University.
Calculate Programme Fee
Fee Table
| COMPANY-SPONSORED | |||
|
PARTICIPANT PROFILE |
SELF-SPONSORED |
SME |
NON-SME |
|
Singapore Citizen < 40 years old Permanent Resident LTVP+
|
$882.90 (After SSG Funding 70%) |
$342.90 (After SSG Funding 70% |
$882.90 (After SSG Funding 70%) |
|
Singapore Citizen ≥ 40 years old |
$342.90 (After SSG Funding 70% |
$342.90 (After SSG Funding 70% |
$342.90 (After SSG Funding 70% |
|
International Participant |
$2,943 (No Funding) |
$2,943 (No Funding) |
$2,943 (No Funding) |
All prices include 9% GST
Please note that the programme fees are subject to change without prior notice.
Post Secondary Education Account (PSEA)
PSEA can be utilised for subsidised programmes eligible for SkillsFuture Credit support. Click here to find out more.
Self Sponsored
SkillsFuture Credit
Singapore Citizens aged 25 and above may use their SkillsFuture Credits to pay for the course fees. The credits may be used on top of existing course fee funding.
This is only applicable to self-sponsored participants. Application to utilise SkillsFuture Credits can be submitted when making payment for the course via the SMU Academy TMS Portal, and can only be made within 60 days of course start date.
Please click here for more information on the SkillsFuture Credit. For help in submitting an SFC claim, you may wish to refer to our step-by-step guide on claiming SkillsFuture Credits (Individual).Workfare Skills Support Scheme
From 1 July 2023, the Workfare Skills Support (WSS) scheme has been enhanced. Please click here for more details.
Company Sponsored
Enhanced Training Support for SMEs (ETSS)
- Organisation must be registered or incorporated in Singapore
- Employment size of not more than 200 or with annual sales turnover of not more than $100 million
- Trainees must be hired in accordance with the Employment Act and fully sponsored by their employers for the course
- Trainees must be Singapore Citizens or Singapore Permanent Residents
- Trainees must not be a full-time national serviceman
- Trainees are eligible for ETSS funding only if their company's SME status is approved prior to the course commencement date. To verify your SME's status, please click here.
Please click here for more information on ETSS.
Absentee Payroll
Companies who sponsor their employees for the course may apply for Absentee Payroll here. For more information, please refer to:
AP Guide (Non-SME Companies)
Declaration Guide (SME Companies)
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