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An Intensive 5 Day Training Course

Advanced Energy Finance Analytics

Markets, Instruments & Risk Management

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Code Date Venue Fee($)
FI131 10 - 14 Dec 2018 Houston TX - USA 6,950
FI131 22 - 26 Apr 2019 Houston TX - USA 6,950
FI131 09 - 13 Dec 2019 Houston TX - USA 6,950

*All fees are exclusive of VAT


Why Choose this Training Course? 

Corporations involved in the energy sector need executives who understand the extreme volatility of global energy markets and how to manage the financial risks created by changing energy prices.  This PetroKnowledge training course is designed to give participants an in-depth understanding of energy finance by addressing three areas of finance in an energy context:  Pricing, asset valuation and risk management.  The training course will increase your comprehension of the energy markets, as well as demonstrate how to model and forecast energy and forward/futures prices.  The PetroKnowledge training course will build knowledge of energy-related derivatives, including the different derivative products and how to apply them in the energy markets to develop hedging and risk management strategies.

This training course will develop an understanding of pricing, risk management, asset valuation and derivatives within the energy markets:


Training Objectives click here

What are the Goals? 

The objectives of this training course are to give an introduction into the basics of energy trading as well as price formation mechanism in the oil and gas industry and to introduce delegates to the manner by which energy corporations manage their business risk (esp. price) exposures, and the derivative securities which can be utilized for this purpose:

  • General overview about trading (terminology, tools, etc.)
  • Overview of energy markets
  • Principles of risk management: Objectives and tools
  • Proper role of derivatives in firms' risk management
  • Differences between exchange and OTC Markets

Target Audience click here

Who is this Training Course for? 

This training course is designed for individuals working in financial analysis, valuation, trading, marketing,  risk management or quantitative analysis positions with oil and gas exploration companies; investment and commercial banking, consulting, and financial services firms working in the energy sector; production and distribution companies; energy trading firms; and corporations outside the energy industry with a significant cost exposure to energy prices, such as energy-intensive manufacturing industries, transportation including air, coal companies and oil-field services.

In terms of job titles, these individuals include:

  • Financial analysts
  • Quantitative analysts or researchers
  • Energy traders dealing with commodities
  • Risk Managers dealing with commodities
  • Commercial and investment bankers dealing with commodities
  • Consultants in the commodity arena
  • Government and regulatory officials, esp. those with responsibilities for the energy sector

Training Methods click here

How will this Training Course be Presented? 

The training course will be presented through a combination of four methodologies:

  • Clear presentation of notes with the requisite supportive analytics
  • Detailed presentation of the relevant empirical regularities/stylized facts of the energy markets
  • Presentation of three case studies designed to exemplify the application of risk-management and valuation principles
  • Interspersed in the lectures are relevant problem-sets, designed to afford participants with the opportunity to apply the principles conveyed and see their implementation

Organisational Impact click here

This executive training course is designed to provide participants with an understanding of pricing, risk management, asset valuation and derivatives within the energy markets: 

  • Use financial models to analyze and forecast energy prices; extrapolate forward prices beyond the liquidity tenor
  • Understand the risk of and return from futures and options contracts on energy commodities
  • Manage and optimize their corporations’ energy risk exposure
  • Estimate and calculate volatility in energy prices
  • Apply option valuation techniques to the energy markets
  • Understand and use derivative products to mitigate energy price risk; use structured products to enhance firm value; understand exotic structures unique to oil (e.g., average option) and gas and power (e.g., swing options, weather derivatives)
  • Utilize real options theory to value energy assets; use information from futures/option prices to make optimal production decisions: Optimal timing for extraction, optimal rate at which to extract oil (gas) from a field; value oil fields, pipelines and storage facilities, power plants
  • Apply Value-at-Risk to the energy industry

Personal Impact click here

The skills acquired in this course include:

  • Understanding the main terminology used in the industry
  • Understanding the formation of oil and gas prices
  • Understanding the linkage between physical and financial oil & gas markets
  • Understanding the role of financial markets as efficient conveyors of information and assessors of risk
  • Understanding the valuation and role of futures contracts and swap agreements
  • Understanding the principles of option and derivative-claim valuation, hedging and uses
  • Understanding the structuring, reverse engineering and valuation of OTC derivatives

Daily Agenda click here

Day One:  The Current State of the Equity and Commodity Markets - The "Message from Markets" 

  • Measuring Nervousness/Uncertainty of Equity and Commodity Markets
  • The Crude-Oil Markets
  • Level and Slope of Crude-Oil Futures Markets
  • Impact of Economic/Financial/Geopolitical Events on Implied Volatilities in the Crude-Oil Market
  • Impact of Seasonality on Global NatGas Markets
  • Future Inflation Rates
  • Quantifying Future Inflation Rates
  • Energy Prices and Inflationary Pressures
  • The Refining Spread and Retail Gasoline Prices
  • The Domestic NatGas Market: The Impact of Seasonality
  • The March/April 2007 Futures Contracts

Day Two:  Overview of Risk Management 

  • Fundamentals of Forwards and Futures Contracts:  Definition, Payoff Diagram, Pricing by Arbitrage
  • Forward/Futures Prices and Forecast Prices
  • Risk-Management from a Corporate Perspective:
  • Commodity Swaps

Day Three: Option Pricing 

  • Payoffs and Put-Call Parity
  • Black-Scholes Formula
  • Option “Sensitivities” (the “Greeks”); Delta and Gamma
  • The Binomial Model and the Valuation of American-Style Options
  • Real Options in Energy Markets:  Power Plants as a Strip of Spark Spread Options; Oil Fields as the Valuation of an Extraction Option

Day Four: Estimating the Price Process in Energy Markets 

  • Historical Volatility; The Term Structure of Volatility (TSOV)
  • Estimating Volatility from Market Prices of Options in Energy Markets
  • Historical or Implied Vols?
  • Estimating a Mean-Reverting Process
  • Characterizing the Volatility “Surface” Across Time and Strike
  • Jump-Diffusion Process
  • The Need to Extrapolate in Energy Finance:  Valuation of Long-Dated Real Assets and Financial Structured Products; Extrapolating Crude-Oil Prices; Extrapolating Natural-Gas Prices; Extrapolating the Term Structure of Volatilities (TSOV); Extrapolating Correlations
  • VAR and CVAR (Credit Value-at-Risk) in the Energy Industry

Day Five: Energy Derivative Products:  The Role of Structuring, Calibration, Valuation and Hedging in Profitable Market-Making 

  • Commercial Structured Products
  • Categorizing derivative products:  option collars, average options, spread options, swing options, weather derivatives, commodity-linked bonds; “Swing” Options; Weather Derivatives
  • Structuring and valuing option collars
  • Structuring and valuing average (Asian) options
  • Example of calibration:  Using vanilla options to determine the value of volatility for valuation of average options
  • Non-Commercial Structured Products

Related Courses click here


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Home » Courses » Finance, Budgeting & Accounting » Advanced Energy Finance Analytics
PetroKnowledge Training


Advanced Energy Finance Analytics
Markets, Instruments & Risk Management


Code Date Venue Fees
FI131 10 - 14 Dec 2018 Houston TX - USA $6,950
FI131 22 - 26 Apr 2019 Houston TX - USA $6,950
FI131 09 - 13 Dec 2019 Houston TX - USA $6,950



Why Choose this Training Course? 

Corporations involved in the energy sector need executives who understand the extreme volatility of global energy markets and how to manage the financial risks created by changing energy prices.  This PetroKnowledge training course is designed to give participants an in-depth understanding of energy finance by addressing three areas of finance in an energy context:  Pricing, asset valuation and risk management.  The training course will increase your comprehension of the energy markets, as well as demonstrate how to model and forecast energy and forward/futures prices.  The PetroKnowledge training course will build knowledge of energy-related derivatives, including the different derivative products and how to apply them in the energy markets to develop hedging and risk management strategies.

This training course will develop an understanding of pricing, risk management, asset valuation and derivatives within the energy markets:


Training Objectives

What are the Goals? 

The objectives of this training course are to give an introduction into the basics of energy trading as well as price formation mechanism in the oil and gas industry and to introduce delegates to the manner by which energy corporations manage their business risk (esp. price) exposures, and the derivative securities which can be utilized for this purpose:

Target Audience

Who is this Training Course for? 

This training course is designed for individuals working in financial analysis, valuation, trading, marketing,  risk management or quantitative analysis positions with oil and gas exploration companies; investment and commercial banking, consulting, and financial services firms working in the energy sector; production and distribution companies; energy trading firms; and corporations outside the energy industry with a significant cost exposure to energy prices, such as energy-intensive manufacturing industries, transportation including air, coal companies and oil-field services.

In terms of job titles, these individuals include:

Training Methods

How will this Training Course be Presented? 

The training course will be presented through a combination of four methodologies:

Organisational Impact

This executive training course is designed to provide participants with an understanding of pricing, risk management, asset valuation and derivatives within the energy markets: 

Personal Impact

The skills acquired in this course include:

Daily Agenda

Day One:  The Current State of the Equity and Commodity Markets - The "Message from Markets" 

Day Two:  Overview of Risk Management 

Day Three: Option Pricing 

Day Four: Estimating the Price Process in Energy Markets 

Day Five: Energy Derivative Products:  The Role of Structuring, Calibration, Valuation and Hedging in Profitable Market-Making 

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© 2018. Material published by Petroknowledge shown here is copyrighted.

All rights reserved. Any unauthorized copying, distribution, use, dissemination, downloading, storing (in any medium), transmission, reproduction or reliance in whole or any part of this course outline is prohibited and will constitute an infringement of copyright.


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