Crude and refined products

Oil risk management, valuation and optimisation

 

  1. Diverse physical asset and financial contracts 
  2. Complex derivative contracts such as crack, time and locational spreads
  3. Flexibility of transporting crude and refined products

... present great challenges to the risk analysis and valuation of crude and refined products.

 

Be confident that you are working with specialists that understand your oil market challenges. 

Oil, like many other commodities goes through cycles of supressed and hyper volatility in both price and demand.  Market players with crude oil and refined products exposure either as a producer, refiner or a large purchaser need to adhere to sound risk management principles to ensure continued profitability.  These market players require software that can capture both financial and physical movements of oil trading, refining and purchasing. 

Lacima understands the specific requirements of oil operators, including marketers, refiners, and exploration and production (E&P) companies.

Our software and consulting services draw on the models and methodologies developed by Lacima’s founders through their acclaimed research and published works. 

Our solutions help you to value and risk manage oil portfolios that include storage and shipping contracts. We can handle structures that include complex pricing features of oil such as crack spreads and index based deals.

We can help you with the oil risk management and valuation challenges you face:

  • Assess the relevant risk metrics based on players with physical oil assets as well as complex oil contracts
  • Analyse hedging strategies to best manage your oil exposure either as a producer, refiner or large consumer
  • Understand the most relevant models to capture the unique characteristics of oil and refined products prices
  • Assess valuation frameworks that accurately value long-term oil contracts which involve complex formulae
  • Capture all the parameters of complex derivative contracts such as index spreads, crack spreads and locational spreads
  • Value refining operations via simulation
  • Value and optimise the flexibility of transporting oil and refined products through pipelines, truck, rail, vessel or barges
  • Analyse large books of oil and refined products derivative deals
  • Scenario analysis such as “what-if” deals, stress testing on prices or volumes, Monte Carlo simulation, and other advanced risk management techniques
  • Understand your VaR changes and drill down with VaR attribution
  • Report company-wide risks across your assets and drill down to individual regions, products, trading desks or even trader to really understand your risks and sources of value
Crude and Refined Products Industry Reference Resources
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