Foundation degrees

Course Information

Energy and Commodities Trading: Practice and Legal Frameworks

Module summary

Module code: FINA1119
Level: 7
Credits: 15
School: Engineering and Science
Department: Applied Engineering and Mgt.
Module Coordinator(s): Aliyah Essop

Specification

Pre and co requisites

None

Aims

This course aims at providing the student with an in depth understanding of the economics and characteristics of the global commodities markets. Trading in these multibillion markets is both highly technical and risky, involving physical traders and speculators, affected by common macroeconomic conditions, such as supply and demand, as well as geopolitical events. Appropriate trading and risk hedging techniques are thus central in achieving the desired outcomes. In particular, applying this critical understanding to the oil, gas, energy, renewables and emissions markets is of paramount importance for the professionals in these sectors. Oil, gas and energy industries are to a certain extent and increasingly regulated and further, traders are dealing with legal issues on a daily basis, such as contracts and disputes. With English law dominating global commodity trading, this course provides the learner with practical knowledge of the relevant legal concepts and the background options of conflicts resolution. Finally, the impact on the environment and alternative energy sources are also examined along with issues of governance and ethics in the context of daily commercial and financial practices.

Learning outcomes

On successful completion of this course a student will be able to:

Learning Outcome

1 Develop a critical understanding of types and nature of commodities in general, the pricing mechanisms and the methods by which these commodities are traded. Furthermore, develop a critical insight of commodities trading risks and the methods of risk mitigation.

2 Develop a critical understanding of energy specific commodities and their markets with emphasis on oil, gas, electricity and emissions trading.

3 Develop a critical appreciation of the regulatory environment surrounding the energy sectors and acquire the necessary knowledge of the legal aspects of contracts, transport documents, insurance options and legal dispute resolution alternatives.

Indicative content

1. Commodities Trading
 The Economics of commodities
 Commodities and financial assets Base and precious metals Agricultural and Soft Commodities
 Energy commodities: Coal, Oil and Gas
 Financial Options
 Option Pricing
 Renewables
 Trading and Risk Hedging





2. Energy Trading
 Overview of the Energy Markets
 Trading Markets
 Natural Gas
 Oil Coal Electricity
 Emissions Markets

3. Commercial & Legal Challenges
 Regulation for the Energy Industries
 Introduction to the Law of Contracts
 Petroleum Contracts: English Law and Practice
 Bills of Lading
 Principles of Insurance and Cargo Insurance
 Litigation and Arbitration

Teaching and learning activity

Teaching is by formal lectures, tutorials and seminar discussion. Special guest lectures and industry visits as appropriate.

Assessment

Methods of SUMMATIVE Assessment: Essay.
Outcome(s) assessed by summative assessment:1-3.
Weighting % 60%
Pass Mark 40%
50% overall
Word Length 3,000
Outline Details:Essay consisting of three case study based reflection - on Commodities Trading Practices; Energy Trading; and Commercial & Legal Challenges.

Methods of SUMMATIVE Assessment Exam.
Outcome(s) assessed by summative assessment:All.
Weighting % 40%
Pass Mark 50%
Word Length n/a
Outline Details: Closed Exam.

Are students required to pass all components in order to pass the course? Yes.