February 2016 - eNewsletters

The latest February 2016 editions of The Energy Education Pipeline eNewsletter are now available.

"I always smirk when there is a trending post on social media that a famous CEO is going to give 100 people $10,000 and all I have to do is like and share the post!  Then I see millions of people, including most of my family, took part and I sigh.  Not that I need to tell you but not everything we read on the internet is true. This is just a microcosm of how questionable information can be consumed by the masses online.

The internet is undoubtedly a double-edged sword as it is full of tremendous information but there is an equal amount of questionable content.  It can be a challenge to identify quality content but the best way is to...."

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February 2016 -North American Edition

February 2016  - International Edition

February 2016  - Asia Pacific Edition

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Piecing Together the Petrochemicals Market Puzzle

agreementIs this the end of the fully integrated and diversified chemical majors in the United States and, in fact, globally?

Dow Chemical and DuPont have merged to a $125-billion conglomerate. The Dow-DuPont merger is expected to be followed by a three-way split.  It will probably be broken down to agchem, basic chemicals and polymers, and advanced materials.

Such a split would mark closure for the broadly diversified chemical business model in the United States and leave BASF as the only notable exception elsewhere. The deal caps the shift, accelerated in the last few years by the interference of activist investors, toward simpler and more focused portfolios. The reshuffle of Dow’s and DuPont’s non-agchem operations would nearly complete the split between basic petrochemicals and feedstocks. A recent IHS update Overview of the Specialty Chemicals Industry identified 30 or so market segments ranging from more than $40 billion/year in revenue (specialty polymers, construction chemicals, cleaning ingredients, and electronic chemicals) all the way down to thermal printing chemicals, valued at $670 million. Basic chemicals will likely be dominated by integrated oil companies, state-owned enterprises, emerging players in Asia, and a few remaining regional players in the United States and Europe. The last group would include a Dow-DuPont combination, LyondellBasell Industries, INEOS, and Westlake.

The rest of the industry is following targeted and more specialized niches spread across those 30 segments. Upstream integration is not essential, and maybe even scale is a hindrance. Focus and ambition have shrunk as R&D emphasis narrows on developing applications and extending product lines rather than invention and developing new products.

Perhaps this is the natural order of things in an industry that has seen giants such as Hoechst, Union Carbide, ICI, and others disappear over the past 20 years.  But this is the end of the diversified chemical company era in the West.  However, in the East, state-owned enterprises and large nationals surely won’t limit themselves to basic chemicals over the long haul.

Gain further insight into concepts and the evolution of the industry by joining us on our Understanding the International Petrochemicals Business - Technology, Markets and Economics course upcoming in Oxford this April.  Learn more about this exciting offering below!

Alan Fisher & Rob Parry  l  Course Directors

Understanding the International Petrochemicals Business - Technology, Markets and Economics
25-27 April in Oxford, UK
The organic chemical industry centres on the relationships between raw materials, intermediates, end products and applications. Basic to these relationships are chemical reactions, and fundamental to the total business is economics. To be able to work successfully within this complex industry requires a combination of practical experience with an understanding of chemistry, markets and economics. The course offers an organised overview of the industry that is essential for the successful operations within it. There are no pre-requisites for this course, nor is any advanced preparation required. Register Now!

New Online Training Course - Options Strategies

Options Strategies is an online training course about how options contracts can be used to achieve objectives in both hedging and for-profit trading.  After introducing some useful terminology, the course explores the features that make options valuable for hedging and trading.  We discuss the disadvantages of simple options strategies, and how these can be overcome by using combinations of bought and sold options contracts to create options spread strategies.  You will learn about collars, three-way collars and other common options spread strategies for hedging.  We will explore the use of spreads in directional trading, and you will see how spreads like butterflies and condors can be used in volatility trading.  You will also learn about costless hedging structures that provide partial participation in favorable price moves.

By the end of this course, you will be able to:

  • Distinguish between  the meaning of the terms directional, non-directional, bullish and bearish as they apply to options spreads
  • Recognize the meaning and the implications of the terms debit and credit in options spreads
  • Read a payoff diagram for an options spread and recognize its implications for either hedging or trading
  • Identify how costless or zero-cost hedging strategies can be constructed
  • Point out the balance of protection and participation afforded by an options hedging strategy
  • Select the main reasons why hedgers may wish to use options spreads rather than simple long options positions
  • Select the main reasons why traders may wish to use options spreads rather than simple long or short options positions
  • Point out the difference between directional and volatility plays in options trading
  • Recognize a simple collar, a three-way collar and other common options hedging strategies
  • Recognize a straddle, a strangle and other common volatility trading spreads
  • Recognize simple directional trading spreads such as a call spread
  • Identify the concept of partial participation in hedging strategies

Click here to learn more and begin the course now!

Will U.S. gas come to Europe? Faculty Member Malcolm Johnson Discusses with Bloomberg Business

Five Questions for Europe's Gloomy Natural Gas Market in 2016

As seen on Bloomberg Business
By: Kelly Gilblom, Anna Shiryaevskaya & Rob Verdonck

Will U.S. gas come to Europe?

Europe, with its accessible trading hubs and underused import infrastructure, may lure U.S. LNG, which has no restrictions on destination and would have to compete with pipeline supplies from Russia and Norway.

“Given the volumes of gas shipped to Europe, the marginal cost of additional Russian gas is low and they should be able to compete with U.S. LNG supplies,” said Malcolm Johnson, a Guildford, England-based faculty member of The Oxford Princeton Programme, an energy training provider. “However, it is clear that in certain countries there is a desire to diversify supplies for supply security.”

That desire to diversify away from Russian dependence has motivated countries such as Lithuania to sign supply agreements with U.S. exporters including Cheniere Energy Inc. U.S. LNG will probably be able to compete on European hubs this winter, Bloomberg New Energy Finance said earlier this month.

Click here for the complete article

January 2016 - eNewsletters

The latest January 2016 editions of The Energy Education Pipeline eNewsletter are now available.

"The clean slate of the New Year often encourages us to make resolutions to better ourselves.  The most popular resolution is undoubtedly to exercise more and eat better.  Another popular resolution, and one I’ll be taking part in this year, is to read a bit more.  You can help me stay on track of my resolution by tweeting me your book recommendations!

The final very popular resolution is to improve your job skills or advance in your career.  Much like a trainer at the gym or the staff at your local bookstore, The Oxford Princeton Programme is your guide to reach your energy career resolutions...."

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January 2016 -North American Edition

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January 2016  - Asia Pacific Edition

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