Books on Physical Commodity Trading
It seems like there's been an increasing amount of attention given to the physical commodities business on this site lately.
If anyone can recommend any good books on the subject please post them here.
Thanks.
P.S.-
Already read the King of Oil.
Electricity Markets: Pricing, Structures and Economics Energy Trading and Investing The King of Oil The New New Thing The Smartest Guys in The Room Trading Commodities and Financial Futures: A Step by Step Guide to Mastering the Markets, 3rd Trading Natural Gas Understanding Today's Electricity Business Understanding Today's Natural Gas Business
SB's for the list
anyone serious about energy will have read or will read these at some point
1. Energy Markets (2012) by Vincent Kaminski, Risk Book
2. Gas Storage Industry Primer- Niska
**3. Fletcher J Sturm (1997) Trading Natural Gas: Cash Futures Options & Swaps. **
**4. Oil and Freight Hedging Process Flows, Swiss Derivatives Review 60, May 2015 **
`"The time seperating the purchase of oil from its sale increases the price risk. The counterparty default risk and the specificity of each transaction introduce additional challenge to oil and freight hedging and make risk management complex."
5. Physical energy trading and Logistics can be found on Wall Street Oasis
"In some places like Saudi Arabia, "it's very simple", TOTAL shows up with a VLCC, they accept their vessel (provided that it is aged less than 15 years, has no any maritime liens...) . The vessel loads 2 million barrels in its holds and it takes about 60 hours of loading. There are never complications (such ice, weather etc) and the logistics is straightforward.
When KOCH loads Western-Canadian Crude in Vancouver, they nominate the oil into the Kinder Morgan pipeline between Edmonton and Burnaby (Buys the line capacity from a regular shipper), schedules a smaller vessel because of the draft limitation, sail through Panama to reach the Gulf Coast. KOCH will possibly transload two cargoes (Aframax) into a larger vessel (Suezmax). The logistics are incredibly complicated because this oil is produced landlocked in the northern part of Alberta or Saskatchewan and the trader has to take it from the oil sands production area, mix with diluent to make it transportable in a pipeline.
The location, the quality, the logistics define the price of the crude".
**6. Helyette, G. (2009). Risk Management in Commodity Markets: From Shipping to Agriculturals and Energy. Wiley Finance. **
7. ****Unbekannter Rohwaren-Riese Mercuria «Meine Familie ist seit 1407 in Genf»
"There are two schools in the commodity trade: The Marc Rich, Glencore and Trafigura school, which is obviously successful. And then there is the investment banking school, which is more based upon a risk point of view.
8. Pirrong, C. (2014). The Economics of Commodity Trading Firms . Trafigura.
** 9. Skadberg, K. (2015) Spatial Competition, Arbitrage, and Risk in U.S. Soybeans
"Conceptually, traders arbitrage price differences until markets have equal basis adjusted for shipping costs. In fact, location arbitrage is a “trading strategy to profit from market inefficiencies in price differences”
**10. CME (2015) Agricultural Products Self-Study Guide to Hedging with Grain and Oilseed Futures and Options. **
121.
Have you hear of The Global Association of Risk Professionals Energy Risk Professional (ERP) program ? The designation is fairly new (2009) the focus is Energy and it is the only of its kind in the world. I would highly recommend the ERP for someone like you willing to cross into Oil/Gas/Power/Commodities to register. The Early Registration for the May 2017 ERP Exam is open.
RBN Energy blog.
Rusty knows his markets.