Vitality Market Tutorial .


31 views
Uploaded on:
Category: General / Misc
Description
Energy Market Tutorial. Presented by Company Webb. Energy Discussion Topics. Basic Definitions Exploration and Production Energy Supply and Demand Petroleum Refining Energy Commodity Trading Physical versus Financial Trading New York Mercantile Exchange Trading Terminology Conclusion.
Transcripts
Slide 1

Vitality Market Tutorial Presented by Company Webb

Slide 2

Energy Discussion Topics Basic Definitions Exploration and Production Energy Supply and Demand Petroleum Refining Energy Commodity Trading Physical versus Financial Trading New York Mercantile Exchange Trading Terminology Conclusion

Slide 3

Basic Definitions Petroleum alludes to raw petroleum or the refined items acquired from the preparing of unrefined petroleum (gas, diesel fuel, warming oil, and so on) Natural gas is a nonrenewable wellspring of vitality utilized for warming and creating power

Slide 4

Basic Definitions Crude oil is measured in barrels 1 barrel = 42 gallons Natural gas is measured in British Thermal Units (BTU) 1 BTU = measure of warmth vitality required to raise 1 lb of water by 1 degree Fahrenheit Gasoline is measured in gallons 1 gallon of gas = 124,000 BTUs

Slide 5

Exploration and Production Oil and characteristic gas were framed from the remaining parts of creatures and plants that lived a great many years back in a marine (water) environment before the dinosaurs Over the years, the remaining parts were secured by layers of mud Heat and weight from these layers helped the remaining parts transform into raw petroleum, normal gas, and coal

Slide 6

Energy Supply The world\'s main 5 raw petroleum delivering nations are: Saudi Arabia Russia United States Iran China About 59.5% of petroleum utilized as a part of the U.S. originates from different nations

Slide 7

Energy Supply Most of the characteristic gas expended in the United States is created in the United States There were 394 dynamic underground stockpiling fields in the Unites States in 2005 The Federal seaward Gulf of Mexico and 5 states represented 77.1% of normal gas generation in 2005

Slide 8

Energy Demand In 2005, add up to US petroleum request was 20.8 million barrels for every day In 2004, the 3 beat petroleum purchasers were: United States China Japan Approximately 22% of US vitality utilization originates from regular gas

Slide 9

Petroleum Refining A refinery takes unrefined petroleum and transforms it into gas and several other valuable items Products from raw petroleum incorporate gas, diesel fuel, warming oil, fly fuel, and black-top

Slide 10

Petroleum Refining Products produced using a barrel of raw petroleum

Slide 11

Energy Commodity Trading Commodities can be exchanged either physically or fiscally Physical exchanging includes the "real conveyance" and receipt of the ware For instance, Company A consents to convey 100 barrels of raw petroleum to Company B at a particular area and value today Financial exchanging includes "contracts" for future conveyance For instance, Company A consents to convey 100 barrels of raw petroleum to Company B at a particular area and cost sooner or later Delivery and receipt just required if contract terminates and holder hasn\'t counterbalance (e.g. sold/purchased contract to/from someone else)

Slide 12

Energy Commodity Trading Physical versus Money related Under a physical exchange, conveyance and receipt of the ware is required for every gathering at once not long after the exchange date (e.g. for normal gas, conveyance/receipt might be required the following day) Under a budgetary exchange, every gathering is committed to convey and get the product sooner or later Trader not committed if the agreement position is counterbalanced to another gathering before the agreement lapses The agreements that are exchanged are money related subordinates that get their esteem from the hidden item

Slide 13

Energy Commodity Trading The New York Mercantile Exchange (NYMEX) is a managed trade that encourages the exchanging of monetary vitality ware contracts (i.e. fates contracts) NYMEX gives liquidity, value straightforwardness, and credit to the purchaser and vender of the agreement NYMEX additionally goes about as "clearinghouse" to every exchange Buyer purchases from NYMEX Seller offers to NYMEX

Slide 14

Terminology Energy exchanging is the same than stock or security exchanging A broker structures a market view and takes the relating position If dealer trusts that costs will rise (bullish), the merchant ought to purchase low, then offer high If dealer trusts that costs will fall (bearish), the dealer ought to offer high, then purchase low A merchant\'s position is either long or short If long, the dealer has purchased a bigger number of agreements than he has sold If short, the merchant has sold a bigger number of agreements than he has purchased

Slide 15

Terminology

Slide 16

Terminology The New York Mercantile Exchange requires the holder of a prospects contract to post edge Margin is like the guarantee that your moneylender would require for an advance Margin prerequisites change as the cost and unpredictability of the ware change A dependable guideline is that edge necessities are around 10% of the agreement esteem

Slide 17

Terminology The terms of a fates contracts are institutionalized for every exchange Volume $/unit Delivery/Receipt Location Each ware contract has its own particular terms:

Slide 18

Crude Oil Example Trader purchases contract when rough is $60/barrel Since broker purchases contract, he anticipates that costs will rise (I.e. bullish) NYMEX obliges broker to post edge (if 10% of agreement esteem, then $6,000) Trader claims an agreement worth $60,000 Trader offers contract when rough is $80/barrel NYMEX discharges edge (thought to be $6,000) Trader offers an agreement worth $80,000 Trader benefits by $20,000 in light of the fact that he purchased an agreement for $60,000 and sold for $80,000

Slide 19

Crude Oil Example The dealer just required $6,000 to make $20,000 in this illustration Trader could have lost $20,000 if costs tumbled to $40/barrel Compare this case to stock ventures Trader purchases 100 shares of ABC stock at $60/share (100 shares * $60/share = $6,000) Trader offers 100 shares of ABC stock at $80/share Trader benefits by $2,000 (100 shares * $20/share)

Slide 20

Conclusion The vitality markets have pulled in numerous speculators in the course of the most recent decade Energy costs are to a great degree unstable Volatility makes both hazard and opportunity Not appropriate for everybody Contact info@energymarketmaker.com for more data

Recommended
View more...