Energy Trading & Risk Management
Elective modulesTrading is the activity that links sectors within the energy industry and underpins its global nature. While long term, fixed price, contracts can still be found, much of supply and demand are reconciled by near term trading or contracts that refer to market prices. Some trading is carried out within energy companies and some within companies in the global finance industry. Some companies trade to just buy and sell their product whereas other also trade to speculate. The aim of this module is to understand energy trading and how it fulfils its role in maintaining a global market for energy.
Trading can sometimes be seen as a separate activity within a firm, requiring different skills and management models. However, as companies increasingly manage energy from multiple sources, an understanding of markets is required by a broader spectrum of management across a company. As high profile cases in energy and other industries have shown, effective risk management is critical to avoid exposure and losses and so you will also consider the management practices necessary to successfully govern trading activity.
Topics covered include:
- The role of trading: sales vs. speculation
- Traded products and markets in the energy industry
- Organising trading activities
- Managing trading across multiple products
- Risk management
- Hedging
- Interaction between trading and other business activities
- Market frameworks: regulation, liquidity & lessons from deregulation.
By the end of this module you will have:
- Understand trading's role in the energy industry
- Be familiar with common products and trading activity
- Understand how trading risk is managed.