Hedging and Management of Energy Price Risk

Programme Code: CRS-N-0045005 (Funding Validity Period: 18 Dec 2017 - 30 Sep 2020)

Overview

Managing Oil Price Volatility

The global economic slowdown has dampened demand for commodities, triggering a downtrend in commodity prices. In the wake of the sharp plunge in oil prices and the ensuing period of volatility, many players face potential losses if they are on the wrong side of trade. Given the complexity and substantial size of energy trades, professionals involved in the trading and financing value chain need to possess vital knowledge to manage risk exposures and ensure sustained profitability. 

The 2-day intensive workshop aims to impart practical approaches to identify, manage and hedge energy price risks in real life situations. Participants are given ample opportunities to gain hands-on experience by analyzing cases involving oil producers, refiners and consumers, and trade simulation exercises. 

Next Course Starts On14 Mar 2019 (Thu) See Full Schedule
Fee SGD1926.00* (as low as SGD217.80* after maximum funding) Learn more
Duration

2 days

Level
Intermediate
Venue

Singapore Management University

Learning Objectives
  • Understand the market structures and dynamics of physical and paper trades
  • Know about hedging tools for protection and opportunities
  • Explore hedging instruments for managing flat price, spreads and basis risk
  • Learn about hedging strategies, risk and limitations
  • Gain hands-on experience via trade simulation exercises and case studies

Topics/Structure

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

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 involve in financing of oil trade
  • Professionals in middle and back office of banks and corporate, in functions such as credit, risk, audit and operations, who are responsible for risk management of energy trades

Assessment

Upon meeting the attendance requirement and passing the assessment, participants will receive a Certificate of Completion.

Fees and Funding

Full Fee: S$1,926 per pax (incl GST)

Nett Fee payable after SkillsFuture Singapore (SSG) Funding:

  • S$577.80 (incl GST) for Singapore Citizens and Singapore Permanent Residents
  • S$217.80 (incl GST) for Singapore Citizens aged 40 years and above
  • S$217.80 (incl GST) for Singapore Citizens and Singapore Permanent Residents on Enhanced Training Support for SMEs (ETSS)
  • S$127.80 (incl GST) for Singaporeans on Workfare Training Support (WTS)

 

• All self-sponsored Singaporeans aged 25 and above can use their $500 SkillsFuture Credit to pay for the programme. Visit the SkillsFuture Credit website (www.skillsfuture.sg/credit) to select the programme.

• Mid-Career Enhanced Subsidy - Singaporeans aged 40 and above may enjoy subsidies up to 90% of the programme fee

• Workfare Training Support (WTS) - Singaporeans aged 35 and above (13 years and above for persons With disabilities) and earn not more than S$2,000 per month, may enjoy subsidies up to 95% of the programme fee.

• Enhanced Training Support for SMEs (ETSS) - SME-sponsored employees (Singaporean Citizens and PRs) may enjoy subsidies up to 90% of the programme fee. For more information, visit www.ssg.gov.sg/programmes-and-initiatives/training/enhanced-training-support-for-smes.html.

• Eligible organisations (excluding government entities) may apply for the absentee payroll funding via SkillsConnect at www.skillsconnect.gov.sg for Singaporean/permanent resident participants attending the programme during working hours. The absentee payroll funding is computed at 80% of hourly basic salary capped at $4.50 per hour or $7.50 per hour for SME or 95% of hourly basic salary for WTS. For more information, visit https://www.skillsconnect.gov.sg/sop/portal/e-Services/For%20Employers/AbsenteePayroll.jsp

 

Union Training Assistance Programme (UTAP)

All NTUC members enjoy 50% *unfunded course fee support for up to $250 each year when signing up for courses supported under UTAP. For details on eligibility, terms and conditions, please click here

Schedule

Start Date(s)
Intake Information

14 & 15 Mar 2019 (Thu & Fri)

Program is held from 9am - 4pm
 

Speaker/Trainer Bio

John Driscoll

John Driscoll’s career in the energy sector spans nearly four decades in the US and Singapore, with senior management experience in supply, trading, energy publishing and price reporting for companies like Maxus, Tosco, Tomen & Ultramar, Mobil Asia and Argus. In 2004, he returned to GS Caltex, handling product trading, risk management, market analysis and training. John retired in 2012 to set up his own Singapore-based advisory and coaching services. He regularly lectures at the Singapore Management University and Ulsan National Institute of Science and Technology.

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