6/21/11

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.

Comments (28)

6/21/11

Crude 101

Financial Modeling

6/21/11

trading natural gas: derivatives something something and something, just look 'trading natural gas'

Best Response
6/21/11

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

6/21/11

Thanks guys, keep 'em coming.

Monty - SB granted.

9/6/11

Just wondering if anyone has links to the pdf file of these books?
Specifically: Electricity Markets: Pricing, Structures and Economics and Understanding Today's Electricity Business
Thanks

9/13/11
nhut:

Just wondering if anyone has links to the pdf file of these books?
Specifically: Electricity Markets: Pricing, Structures and Economics and Understanding Today's Electricity Business
Thanks

only hard copy here

9/19/11

How about any books on metals and/or their related raw materials?

Financial Modeling

7/7/16

is there anything that would introduce me to trading metals and minerals?

7/18/16

For some oil history, "The Prize" Daniel Yergin. How a big oil company moves about, "Private Empire - ExxonMobil and American Power" Steve Coll. "Maritime Economics" Martin Stopford

7/19/16

A good book that will give you history and a better understanding of the industry is "Merchants of Grain" by Dan Morgan. certainly recommended.

7/19/16
  • Oil 101 - Morgan Downey
  • Commodities and Commodity Derivatives: Modelling and Pricing for Agriculturals, Metals and Energy - Helyette Geman
  • Hedgehogs (About the rise and fall of energy trader Brian Hunter and Amaranth)
  • Any book on Marc Rich... Metal Men, since youve read King of Oil

Been looking for more about metal trading as i have (distant) family in the business, but it all seems to be energy related. Base metals trading especially seems to be a very closed industry.

7/19/16

Why not start with the basics such as "Commodity Trading Manual" by the Chicago Board of Trade?

We used this text as part of my energy trading course and, although it is a bit dated it was still useful to learn everything from the history of markets and the beginning of trading to the operations of an exchange down to individual commodities (oil through soybeans).

1/7/17

CME trading manual is basics about the financial market, not about the physicals.

Traders hedge soybeans with the CME benchmark and trade the difference between the CME and local prices.

To get into the physical trade you need a curriculum in Agronomics, a farm-background.

Array

8/1/16

Hedgehogs was sick. Maybe cause I worked with alot of guys who knew b hunter from his time at TCPL

8/2/16
nattyphizz:

Hedgehogs was sick. Maybe cause I worked with alot of guys who knew b hunter from his time at TCPL

great read and i know a few of the guys in the book which makes it even more wild. They def got some great info from the brokers on that one

8/1/16

Petroleum Refining for the non-technical person (In-depth look at the science behind the refining and product specs)
energy trading and Investing (General overview of each sector).

Sign up to John Kemp (Reuters) daily newsletter. Read it daily and immerse yourself in the world of oil/energy.

8/4/16
ODS-UK:

Petroleum Refining for the non-technical person (In-depth look at the science behind the refining and product specs)energy trading and Investing (General overview of each sector).

Sign up to John Kemp (Reuters) daily newsletter. Read it daily and immerse yourself in the world of oil/energy.

good add. Great book and sitting on my desk....

11/15/16

Check out the Oil Trading Manual, it's available on Scribd from Elsevier Science. 1000 pages, with about 2 dozen authors with hundreds of years of experience, and it's way more in depth than oil 101, goes into organic chemistry, refining processes, shipping, logistics, derivatives, etc. Written circa 95-02, it's a bit out of date, but I found it the best book out there. The OTM normally retails for $1500 USD (yes almost 2 fucking grand), but you can get it with a $9 subscription (or a free on a 1-2 month trial).

If you're looking at physical you'll be wanting to look calendar/basis spreads; the Complete Guide to Spread Trading is a good book for an overview.

If you're looking at hedging I'd start with a basic options book then dive into Nassim Taleb's Dynamic Hedging which deals with far more complicated exotics but explained in a down-to-earth manner. I've read some exotic option books, and they're aimed at PhD Quants, littered with useless equations being solved to up the page count.

Elsevier also has manuals for Natty, Sugar and Cotton, all very interesting. If anyone knows any other books that are like that for other commodities I'd be very interested.

Cheers

1/7/17

Ton of books, website covering the market but doesn't cover the physicals.

Array

1/18/17

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 >

"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.

1/7/17

Are these books entry-levels.
How physicals is the erp program.

Array

12/31/16

RBN Energy blog.

Rusty knows his markets.

1/2/17

don't know why someone down voted you....?

1/7/17

Useless for physical trading

Array

1/8/17

I'm not sure you understand what physical trading is.

The rbn blog is an incredible free source of info that is well written, based entirely on fundamentals and solely physical in nature. It is amazing that the cover as many aspects of the North American energy markets as they do.

From a strictly nat gas perspective Rusty Braziel was one of the original Bentek guys. Bentek basically redefined gas trading selling info to the masses that previously you had to be a sophisticated shop to develop.

One if the better moves interns and new grads could make would be to convince their boss to send them to his events.

1/8/17

The Story Of Metal Trading by the Waszkis is quite a read although it's fairly dry and unless you are already in metal trading I'm not sure it's worth it.

1/9/17

Array

1/15/17
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