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Best Intro Energy Trading Book

May 15th, 2014, 9:12 am

So I've extensively traded commodities (ags, softs, metals) for a while now, but I'd really like to step into energy products, more specifically oil and refined products instead of power/electricity. I've heard Oil 101 ( is essential. Anyone have any criticism on this book?I've run across some others as well ( but it seems less trading related and more long term investing. Nothing too technical, but something to at least give me a solid understanding of seasonality, supply and demand, grades, production etc etc etcI'd appreciate any recommendations or advice! Thanks!
 
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observer84
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Best Intro Energy Trading Book

May 19th, 2014, 10:19 pm

I read (through parts) it several years ago. Found it extremely detailed in some aspects. As I am no trader I cannot tell for sure (in the sense of what is "important" for you guys), but it seems to be that about half of the book is too "technical"(although still very interesting) to be of use for trading. Also the book seems to be very focused on the US market (especially in the later chapters with storage, refining etc.). I keep it on my bookshelf as a general reference but it is probably difficult to read completely at once (and if you are not focused on a certain aspect).Another, probably more modern book (a lot less technical, but not necessarily better):Understanding Oil PricesProvided some interesting insights in seasonality, spot trading at terminals and impact of refinery capacities of varying refining capabilities. bestobs
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Best Intro Energy Trading Book

May 20th, 2014, 6:30 am

Thanks Obs, I will definitely check it out!Since I posted I've acquired Oil 101 from a friend here and while the majority of the first half of the book is very technical (and not really useful to me, but I do love the depth of the book), the second half does leave me wanting more. The info is great and touches on options, forwards, futures, and spot pricing, but only scratches the surface. Unfortunately, the seasonality section of the book is a depressing 9 pages long, no where near what I'd hope to find in such a technical book.Which leads me to believe that I will continue my search. While extremely informative, oil markets have become drastically out of balance with Opec reserve/production numbers, world storage #'s, and other fundamentals. Most fundemental texts don't realize this, and continue to misinform with each new edition. A book or even white papers that give insight into the evolution of correlations and relations between products due to world events would be exactly what I'm looking for, but I don't know if it exists. Oil 101 was like the training wheels, now I'm searching for something much more market oriented. Any other suggestions? All are welcome to voice their opinions.
 
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observer84
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Best Intro Energy Trading Book

May 20th, 2014, 7:22 am

QuoteSince I posted I've acquired Oil 101 from a friend here and while the majority of the first half of the book is very technical (and not really useful to me, but I do love the depth of the book), the second half does leave me wanting more. The info is great and touches on options, forwards, futures, and spot pricing, but only scratches the surface. Unfortunately, the seasonality section of the book is a depressing 9 pages long, no where near what I'd hope to find in such a technical book.That basically sums up what I was trying to tell you. I guess, if you need some technical guidance for a specific oil-market related topic you have a good general reference, not a lot more. The chapter on financial products wasnt helpful at all as it is very basic stuff and offers no great suprises..The chapters on refining and its inputs / outputs was kind of interesting though. Might be getting more important as residual fuels seem to be traded a lot more recently (read on bloomberg that many trading desks start trading this stuff now).QuoteWhich leads me to believe that I will continue my search. While extremely informative, oil markets have become drastically out of balance with Opec reserve/production numbers, world storage #'s, and other fundamentals. Most fundemental texts don't realize this, and continue to misinform with each new edition. A book or even white papers that give insight into the evolution of correlations and relations between products due to world events would be exactly what I'm looking for, but I don't know if it existsI am not exactly sure what you are looking for and what you mean by "out of balance"? Do you mean the issue of unreliable opec-numbers and storage? What correlations are you interested in? Different grades? Spot vs. Futures?Here is one paper someone in this forum suggested I should read (quite some time ago, cannot really remeber the details):Third oil price surgeVery global perspective, might be helpful.Bestobs
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Best Intro Energy Trading Book

May 20th, 2014, 4:55 pm

Did you have a look at H.Geman's books?And you can get insights on energy markets reading through C.Alexander's books as well.Oil 101 only touches the subject sometimes IMO. EDIT: you can also be interested in D.Lautier's papers. EDIT2: please also have a look at the readings recommended by Will Smith who doesn't appear often enough in wilmott's forums.
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observer84
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Best Intro Energy Trading Book

May 21st, 2014, 12:06 am

Right. Almost forgot about Will Smith's site, which is quite nice (although he doesnt seem to be that active anymore).I prefer Eydeland's book (Energy and Power Risk Management) over Geman's. Also, this paper on the oil pricing system was very intersting to read:the oil pricing systemBest obs
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Best Intro Energy Trading Book

May 21st, 2014, 3:40 am

Excellent!! This is more in line with what I had in mind. Orbs - Right, unreliable storage and production numbers by OPEC, PLATTS, etc. I don't look to trade purely fundamental because I don't have access to the insider knowledge within the industry. So purely statistical for me. Correlations between energy products currently on any exchanges (futures, options, swaps, whatever) over time. Some prior research on correlation transformations between products over time would be a great starting point for me so I don't have to waste time looking for the needle in the haystack from scratch. I can figure out the direction I want to go after seeing how things have progressed over the years. That 1st PDF looks great, I'll look to see if I can find it for free. Tagoma - I am familiar with her work, but didn't want to throw down the cash to pick up her texts without some opinions from those who have read them. What are your thoughts? I am VERY familiar with Alexander, but wasn't aware her books/publications covered energy markets. Thank you!! I am reading them currently. The other links have proven extremely helpful. I have a lot to go with now. As always, white papers are entirely more beneficial than any book. Thanks again guys! Any other recommendations? I'm all ears
 
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blueraincap
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Best Intro Energy Trading Book

May 22nd, 2014, 2:43 am

i have "understanding Oil Prices" pdf.Can we swap ? I want Oil 101 I will send you "Understanding Oil Prices", "covering Oil: A Reporter's Guide to Energy and Development ", "Energy Risk " "Oil: An Overview of the Petroleum Industry "For an electronic version of Oil 101
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Best Intro Energy Trading Book

May 22nd, 2014, 8:50 am

Unfortunately, I've got the hardcover from a colleague! If you're willing to share, I'll see what else I can provide that interests you?
 
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blueraincap
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Best Intro Energy Trading Book

May 22nd, 2014, 10:18 am

do you need to return it? you can get a printing shop to chop the book and make it pdf for like $3.if thats possible, i will also throw in
 
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blueraincap
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Best Intro Energy Trading Book

May 22nd, 2014, 10:28 am

if PDFing your copy is not an option, you can download it from This alternative option costs $8. I will send you the 5 books (in pdf)