Course 11 of 20 · Crude Oil Desk Academy

Calendar Spreads, Curve Shape and Storage Economics

Stage C, Market analysis. Level 6 of 10.

Contango and backwardation, carry arithmetic, and storage as a traded commercial decision.

119 chapters · 12 modules · every chapter one 8 to 10 minute explainer · builds on: Course 04, Course 07, Course 10

Enrol or enquire See the 119 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

Chapters run in order. Each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

12 modules · 119 chapters

Open any module for its full chapter list, in teaching order.

M0 The Time Dimension of Crude Price Ch 1-9
  1. Why the Same Barrel Has Many Prices at Once
  2. What Time Risk Is and Who Carries It
  3. The Three Questions the Curve Answers
  4. Prompt, Forward and Deferred: The Vocabulary
  5. Why a Trader Would Deliberately Hold Inventory
  6. Storage as a Trade, Not a Facility
  7. What This Course Assumes You Already Have
  8. The Two Ways to Express a View on Time
  9. Map of the Modules and What Is Deferred
M1 Reading and Building the Forward Curve Ch 10-20
  1. What a Forward Curve Actually Is
  2. The Inputs a Curve Is Built From
  3. Building a Monthly Curve from Listed Settlements
  4. Interpolating Where the Market Does Not Quote
  5. Liquidity Along the Curve
  6. Physical Curves Versus Paper Curves
  7. Curves for Grades That Have No Curve
  8. Reading a Curve in Five Seconds
  9. Seasonality in the Shape
  10. The Curve Over Time: A Second Dimension
  11. Common Ways a Curve Misleads
M2 Contango, Backwardation and the Scarcity Signal Ch 21-30
  1. Contango: Definition and First Reading
  2. Backwardation: Definition and First Reading
  3. What Each Shape Says About Scarcity
  4. Flat, Kinked and Mixed Shapes
  5. Convenience Yield in Plain Language
  6. Why Contango Cannot Widen Forever
  7. Why Backwardation Has No Arithmetic Ceiling
  8. The Full Carry Market and the Partial One
  9. Shape Transitions and What Causes Them
  10. Reading Shape Across Two Benchmarks at Once
M3 The Full Cost of Carry Ch 31-41
  1. The Carry Equation, Assembled
  2. Storage Cost as a Rate per Barrel per Month
  3. Fixed Versus Variable Storage Charges
  4. The Cost of Money in the Carry
  5. Insurance, Loss and Shrinkage
  6. Quality Degradation While Stored
  7. In and Out Costs: The Terms People Forget
  8. Carry on a Cargo Versus Carry in a Tank
  9. A Worked Carry Calculation, Part One: The Costs
  10. A Worked Carry Calculation, Part Two: The Verdict
  11. Why Two Desks Compute Different Carry
M4 The Storage Breakeven Ch 42-51
  1. The Breakeven Spread, Stated Once
  2. Comparing Breakeven with the Market Spread
  3. Choosing the Holding Period
  4. Locking the Exit Before You Buy
  5. When the Curve Says Store and the Tank Is Full
  6. Breakeven in Backwardation: The Reverse Decision
  7. Opportunity Cost of Capacity You Already Hold
  8. Partial Fills and Blended Entry
  9. The Storage Trade Decision Sheet
  10. Sensitivity of the Decision to the Funding Rate
M5 Intrinsic and Extrinsic Value of a Storage Right Ch 52-60
  1. Two Kinds of Value in a Tank
  2. Valuing the Intrinsic Part
  3. Why the Extrinsic Part Exists
  4. The Rolling Intrinsic Approach
  5. What Capacity Shape Does to Value
  6. Valuing a Right You Do Not Yet Hold
  7. Subletting and Releasing Capacity
  8. Marking a Storage Right in the Books
  9. A Worked Right Valuation
M6 Cycling a Tank Ch 61-69
  1. What Cycling Means and Why It Pays
  2. Injection and Withdrawal Rates as the Binding Constraint
  3. Tank Heel, Linefill and Operating Availability
  4. Segregation Versus Commingling
  5. Scheduling Cycles Against the Curve
  6. Blending Opportunities Created by Cycling
  7. Operational Failures That Kill a Carry Trade
  8. Measuring Whether a Tank Earned Its Keep
  9. A Cycling Case: Three Months, One Tank
M7 The Calendar Spread as a Position Ch 70-80
  1. The Calendar Spread Defined
  2. Quoting Conventions and Which Way Is Long
  3. What a Spread Position Actually Risks
  4. Spreads as a Financial Mirror of Storage
  5. Trading a Spread You Believe Is Too Narrow
  6. Trading a Spread You Believe Is Too Wide
  7. Butterflies and Three-Leg Structures
  8. Spreads Between Quarters and Calendar Years
  9. Margin and Capital on a Spread Book
  10. Position Limits and Accountability on Spreads
  11. A Spread Trade from Entry to Exit
M8 Roll Mechanics and Managing the Book Ch 81-90
  1. Why a Position Must Be Rolled
  2. The Roll Cost Calculation
  3. Roll Timing and the Crowd
  4. Rolling a Hedged Physical Position
  5. Roll Yield as a Return Component
  6. Building a Roll Schedule
  7. Expiry Risk and Going into Delivery
  8. Rolling Across a Seasonal Boundary
  9. Reporting the Spread Book
  10. A Roll Gone Wrong
M9 Floating Storage Ch 91-99
  1. When the Sea Becomes a Tank
  2. The Freight Side of the Carry
  3. Vessel Size and the Minimum Viable Parcel
  4. Costs That Only Appear Afloat
  5. Floating Storage and the Price of Flexibility
  6. Who Finances Oil Afloat
  7. Reading Floating Storage as a Market Signal
  8. The Unwind Problem
  9. A Floating Storage Decision, Worked
M10 Curve Shape, Inventory and Structural Limits Ch 100-110
  1. Shape and Stock Level: The Relationship
  2. Which Stocks Actually Matter to the Curve
  3. Days of Cover as a Shape Predictor
  4. The Capacity Ceiling on Contango
  5. The Storage Supply Curve
  6. Tank Tops and What Happens There
  7. Why Reported Capacity Overstates Usable Capacity
  8. Inventory Cycles and the Shape That Follows
  9. Regional Capacity and Why Shape Differs by Place
  10. New Capacity and the Shape It Permits
  11. Shape as Evidence, Not Instruction
M11 Integration, Worked Cases and Honest Limits Ch 111-119
  1. Bringing the Curve and the Tank Together
  2. Choosing Between the Tank and the Paper Spread
  3. A Contango Case, Part One: The Opportunity
  4. A Contango Case, Part Two: The Decision and the Outcome
  5. A Backwardation Case: The Owner Who Must Decide
  6. The Mistakes This Subject Produces Most Often
  7. What Curve and Carry Analysis Cannot Do
  8. Handing Over to the Hedge Decision
  9. The Desk-Ready Summary

The brochure gives each of these 119 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 11 of twenty

It stands alone, and it is also the entry point to the Crude Oil Desk Academy pathway.

Enrol or enquire See the whole pathway