Professional Training

Introduction to Energy Commodities, Markets and Trading

2 days
2 days
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Course description

This two-day course will serve as an excellent introduction to the major energy commodities – oil, natural gas, electricity, and coal.

The course will begin by covering their key characteristics, production and end-use markets.  Delegates will then progress towards learning in more detail about the wholesale and retail markets for these commodities.  Finally, the course will cover the key topics and fundamentals of energy trading.

This course will primarily have a European focus but would cover the wider global market where appropriate.

Includes Online Pre-study Module
This course is accompanied by a preparatory course available online. Delegates will receive a web voucher as part of their joining instructions upon confirmation of registration. By taking advantage of this "blended" learning approach, in-class time and learning are optimized.

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The course is suitable for anyone who wants to gain a greater understanding of the major energy commodities and their markets including new entrants to the industry, as well as existing market participants who want to broaden their market knowledge. It could also appeal to individuals in the service side of the industry (financial, software, consulting, etc).


Energy Value Chains

  • Structure of oil and gas markets: upstream, midstream, downstream
  • Main value creation steps in oil and gas
  • Main value creation steps in coal
  • Main value creation steps in electricity
  • Key characteristics of coal, oil, gas and electricity as commodities

Global Energy Markets

  • Global supply and demand for oil, gas, coal and electricity
  • Trade flows for oil, gas and coal
  • Consumption of fossil fuels
  • Main end-use markets for oil, gas, coal and electricity
  • Important energy industry trends

Fossil Fuels

  • Formation of oil, gas and coal
  • Oil and gas reservoirs
  • Conventional and non-conventional oil and gas
  • Composition of oil, gas and coal
  • Hydrocarbons and the importance of size and shape
  • Key quality characteristics of crude oil
  • Key quality characteristics of natural gas
  • Key quality characteristics of coal

Fossil Fuel Extraction

  • Obtaining access to resources
  • Finding and drilling for oil and gas
  • Oil sands and shale
  • Coal mining and processing
  • Resources and reserves

Fossil Fuel Transportation

  • Marine transport of coal, oil and gas
  • Pipeline transport of oil and gas
  • Storage of oil, gas and coal

Oil Refining and its Products

  • What a refinery does
  • Key refining processes
  • Refining industry trends
  • Blending and biofuels
  • Road transport, aviation and marine fuels
  • Lubricants and specialty products
  • Petrochemicals

Electricity Generation

  • Generation technology: turbines and others
  • Key concepts: capacity, generation, efficiency
  • Combined cycle units and combined heat and power (CHP)
  • Baseload and peak load
  • Response to demand imbalance
  • Generation fuel mix in Europe
  • Use of coal in electricity generation
  • Electricity transmission and storage

Credit and Allowance Markets

  • EU emissions trading system
  • Biofuels credits and other tradable allowances

Trading Markets

  • Spot physical markets
  • Forward physical markets
  • Term contracts
  • Exchange traded futures
  • Swaps and other Over-the-counter derivatives
  • Retail markets

Reasons for Energy Trading

  • Trading for physical supply
  • Opportunistic trading
  • Non-physical trading strategies
  • Types of market participant
  • Risk appetite

How Physical Trading Works

  • Marine trading of oil and coal
  • Chartering a vessel
  • Pipeline trading of oil
  • Gas and power trading in Europe
  • Role of Transmission System Operator and network users
  • Balancing
  • Capacity allocation and trading

Trading Locations and Markets

  • Key oil trading markets
  • Key coal trading markets
  • Natural gas trading arrangements
  • Electricity trading arrangements

Pricing Mechanisms

  • Fixed and floating pricing
  • Posted and official selling process
  • Benchmark pricing in oil trading
  • Key prices in the natural gas markets
  • Key prices in the coal markets
  • Spark and dark spreads
  • Crack spreads and refinery netbacks
  • Forward prices, backwardation and contango

Market and Trading Mechanisms

  • Bilateral, OTC and Exchange trading
  • Pool and auction mechanisms
  • Bids and offers
  • Order types
  • Screen-based trading
  • Contractual arrangements

Commodity Details

  • Crude oil quality and value
  • Crude oil measurement and units
  • Natural gas measurement and units
  • Coal quality and value
  • Coal measurement and units


  • The need for flexibility in gas and power
  • Sources of physical flexibility
  • Value of storage
  • Trading around

The course will also include a competitive team trading and supply game and several short class or group exercises.

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