🛢️ Oil Trading — Complete Report Suite

ALL TRADING REPORTS EXPLAINED

Every number derived from scratch — no hidden assumptions — use sliders to simulate your own position
R-01Position Report
R-02Mark-to-Market
R-03Commercial Margin
R-04Capital Charges
R-05Exposure / Risk
R-06End of Day
The Position Report is the very first thing you open every morning.
It answers one question: "Where am I right now?" — what physical oil do I own, what paper hedges do I have, and do they match up so that I am not accidentally exposed to price risk?
Simple analogy: imagine your bank statement. On one side you have money coming in (physical oil you bought = assets). On the other side you have obligations (swaps you sold = liabilities). The position report checks that both sides balance. If they don't — you have open risk you need to act on immediately.
Three things every position report shows
Physical positions
What you OWN
Real barrels bought or sold
Paper / hedges
What you OWED
Swaps & futures offsetting price risk
Net position
The BALANCE
Physical + Paper combined
Open diff exposure
The RISK LEFT
What is still unpriced/unsold
SAP BW analogy: the position report is like your balance sheet query in BW — assets on one side, liabilities on the other, net at the bottom. A flat (zero) net means fully hedged. Any non-zero net means open risk that needs attention.
How to read a position report — line by line
GradePeriodPhysical (kbbls)Paper/Hedge (kbbls)NETWhat it meansAction
WTIMay-26+1,000−1,0000Bought 1M bbls, hedged 1M bblsNo action
WTIJun-26+500−5000Bought 500k bbls, fully hedgedNo action
WCSJun-26+3000+300Bought 300k WCS, NOT hedged yetHedge now!
BrentMay-26−400+4000Sold 400k Brent, hedged longNo action
The WCS row is the critical one. You bought 300,000 barrels of Western Canadian Select but you have not sold a swap to hedge it. That means if WCS prices fall, you lose real money with no offset. The position report catches this every single morning before you trade.
What each column tells you
GRADE
Which crude oil type
WTI (West Texas), Brent (North Sea), WCS (Canadian heavy), Dubai (Middle East). Each has its own price and differential.
PERIOD
Which delivery month
May-26 means barrels that physically move in May 2026. Hedges must match the same month — otherwise you have timing risk.
PHYSICAL
Real barrels — positive = you own them, negative = you owe them
+1,000 means you bought 1,000,000 barrels. −400 means you sold 400,000 barrels (you must deliver them to a buyer).
PAPER
Financial hedges — swaps and futures
−1,000 means you sold a swap for 1,000,000 barrels. This is what offsets your physical long position.
NET
Physical + Paper combined — should be zero
Zero means you are fully hedged. Any non-zero number means you have open price exposure. Positive net = long (exposed if price falls). Negative net = short (exposed if price rises).
Build your own position — set what you bought and what you hedged.
Watch how the net position and risk status change in real time.
WTI May — barrels bought (kbbls)
1,000 kbbls
WTI May — swap hedged (kbbls)
1,000 kbbls
WTI May — sold forward (kbbls)
800 kbbls
Physical net+200 kbbls (bought 1,000 − sold 800)
Paper (swap)−1,000 kbbls
=Combined net−800 kbbls NET SHORT
⚠️ Over-hedged — swap is larger than physical net
Physical bought
1,000 kbbls
Sold forward
800 kbbls
Physical net
+200 kbbls
Position status
OVER-HEDGED
Mark-to-Market (MtM) asks: what is my book worth RIGHT NOW at today's prices?
Not what you paid. Not what you hope to get. What could you close everything out for this second if you had to?
Simple analogy: you bought a house for $400,000. Today the market says it's worth $430,000. Your mark-to-market gain is +$30,000 — even though you haven't sold it. In oil trading, this happens every single day on every single barrel you own.
The two components of MtM — and why one should always be near zero
Flat price MtM
Should be ~Zero
Physical gained $X as price rose → Swap lost $X as price rose → Net = zero. This is your hedge working perfectly.
Differential MtM
This is your real P&L
You bought diff at +$1.20. Market now quotes +$1.45. Your diff MtM = +$0.25 × volume. This is where trading skill is measured.
SAP BW analogy: MtM is like a delta load revaluation — you are recalculating the current value of all open positions using today's market prices instead of the original transaction prices. The difference between original cost and current market value is your unrealized P&L.
Flat price MtM — why it cancels out
You bought physical at$82.50 / bbl
Market price today$83.20 / bbl
=Flat price move+$0.70 / bbl
Your physical volume1,000,000 bbls
Physical MtM = 1,000,000 × +$0.70 = +$700,000
BUT — your short swap also moved: 1,000,000 × −$0.70 = −$700,000
Net flat price MtM = +$700,000 − $700,000 = ~$0 ✓
Differential MtM — your actual trading profit signal
You bought diff at+$1.20 / bbl
Market diff today+$1.45 / bbl
=Diff MtM gain+$0.25 / bbl
Open volume1,000,000 bbls
Diff MtM = 1,000,000 × +$0.25 = +$250,000
This is unrealized — you haven't sold yet. But the market is telling you your diff purchase was a good trade.
Physical MtM
+$700,000
Price rose $0.70 × 1M bbls
Swap MtM
−$700,000
Short swap lost as price rose
Net flat MtM
~$0
Hedge working perfectly ✓
Diff MtM
+$250,000
Your real trading gain
Adjust prices below — watch how flat price MtM always cancels (hedge works) but diff MtM shows your real trading gain or loss.
Your purchase price ($/bbl)
$82.50
Market price today ($/bbl)
$83.20
Diff you paid ($/bbl)
+$1.20
Diff market today ($/bbl)
+$1.45
Volume (kbbls)
1,000 kbbls
Physical MtM1,000,000 × +$0.70 = +$700,000
Swap MtM (offset)1,000,000 × −$0.70 = −$700,000
=Net flat MtM~$0 (hedged)
Diff MtM1,000,000 × +$0.25 = +$250,000
Total Book MtM = +$250,000
Flat price MtM
~$0
Hedge cancels it
Diff MtM
+$250,000
Your trading P&L
Total book MtM
+$250,000
Unrealized today
Signal
GOOD TRADE ✓
Diff moved in your favour
The Commercial Margin Report answers: after ALL costs, how much money did I actually make?
MtM shows you market value. Commercial margin shows you real profit — after pipeline fees, quality adjustments, financing, freight, and every other cost of physically moving that barrel.
The #1 mistake junior traders make: they focus on the diff gain and forget the costs. A trade that shows +$0.25/bbl diff gain can easily become a loss of −$0.24/bbl after a $0.35 pipeline tariff. The commercial margin report is where reality hits.
The full chain — from gross to net
Sale revenue
+$83.95/bbl
Purchase cost
−$83.70/bbl
= Gross margin
+$0.25/bbl
Pipeline tariff
−$0.35/bbl
Quality adj
−$0.05/bbl
Financing
−$0.09/bbl
= NET margin
−$0.24/bbl ⚠️
Gross margin was +$0.25/bbl but total costs were −$0.49/bbl. Net result = −$0.24/bbl loss. This is why you must know your logistics costs BEFORE you agree the trade — not after.
Every line item — where it comes from
Line item$/bblOn 800k bblsHow it's derived
Sale price (revenue)+$83.95+$67,160,000Agreed sale diff +$1.45 × WTI avg $82.50
Purchase price (cost)−$83.70−$66,960,000Your buy diff +$1.20 × WTI avg $82.50
Gross trading margin+$0.25+$200,000Sale diff − buy diff = $1.45 − $1.20
Pipeline tariff−$0.35−$280,000Fixed fee per bbl to move oil in pipe
Quality adjustment−$0.05−$40,000Buyer deducts for slight quality diff
Financing cost−$0.09−$72,000Cost of borrowing to fund inventory
Inspection/demurrage−$0.00−$15,000Ship waiting fees + inspection charges
NET COMMERCIAL MARGIN−$0.24−$207,000LOSING trade after costs
Gross margin = +$0.25/bbl. But pipeline alone cost $0.35/bbl — more than the entire gross margin. This deal lost money. The trader needed to either sell at a higher diff (+$1.60 minimum) or find a cheaper logistics route.
Adjust your deal parameters — watch the margin waterfall build from gross to net. The break-even diff sale price updates automatically.
Diff you bought at ($/bbl)
+$1.20
Diff you sold at ($/bbl)
+$1.45
Volume sold (kbbls)
800 kbbls
Pipeline tariff ($/bbl)
$0.35
Financing cost ($/bbl)
$0.09
Other costs ($/bbl)
$0.05
Gross marginsell $1.45 − buy $1.20 = +$0.25/bbl
Total costspipeline $0.35 + fin $0.09 + other $0.05 = $0.49/bbl
Net margin = +$0.25 − $0.49 = −$0.24/bbl
On 800,000 bbls → Total net = −$192,000
Break-even sale diff needed = +$1.69/bbl
Gross margin
+$0.25/bbl
Diff sold − diff bought
Total costs
−$0.49/bbl
All logistics + financing
Net margin/bbl
−$0.24/bbl
Real profit per barrel
Total net P&L
−$192,000
On sold volume
The Capital Charges Report asks: is this trade worth the company's money being tied up?
Holding 1,000,000 barrels of oil worth $83M means $83M of company cash is locked up. That money has a cost — called the hurdle rate — the minimum return the company expects. If your trading profit doesn't exceed this cost, you are destroying value.
Simple analogy: you borrow $83M from the bank at 8% per year. Every day you hold the oil you pay interest: $83M × 8% ÷ 365 = $18,192/day. If you make less than $18k profit per day from trading, you are losing money overall — even if the trading P&L looks positive.
Why senior traders obsess over this — junior traders ignore it
Without capital charges
+$389,000
Commercial margin for the month. Looks profitable. Junior trader is happy.
With capital charges
−$121,000
After deducting $510k cost of holding $83M inventory for 28 days. Senior trader is not happy.
The hidden killer. A trade that made $389,000 in gross margin actually destroyed $121,000 of company value because inventory was held too long. The fix: sell faster, negotiate a lower buy diff, or negotiate a higher sell diff.
Daily capital charge — the exact calculation
Inventory value (MtM)$83,200,000(1,000,000 bbls × $83.20 market price)
×Annual hurdle rate8%(minimum return company expects)
÷Days in year365
Daily capital charge = $83,200,000 × 8% ÷ 365 = $18,230 / day
Every single day you hold this inventory, $18,230 is charged against your P&L
Monthly accumulation
Daily charge$18,230 / day
×Days held28 days
Monthly capital charge = $18,230 × 28 = $510,440
Economic P&L — the full picture
Commercial margin (trading profit)+$389,000
−Capital charge (cost of holding)−$510,440
Net economic P&L = +$389,000 − $510,440 = −$121,440
This trade DESTROYED value despite positive commercial margin
Adjust the sliders to see how inventory size, holding period, and trading margin interact. Find the break-even point where the trade starts creating value.
Market price ($/bbl)
$83.20
Volume held (kbbls)
1,000 kbbls
Hurdle rate (% per year)
8%
Days held
28 days
Commercial margin ($)
$389,000
Inventory value$83,200,000(vol × market price)
Daily charge$18,230 / day(inventory × rate ÷ 365)
Total capital charge−$510,440(daily × days held)
Economic P&L = +$389,000 − $510,440 = −$121,440
Break-even: need $510,440 commercial margin OR sell in 22 days
Inventory value
$83.2M
Daily capital cost
$18,230/day
Total charge
−$510,440
Economic P&L
−$121,440
The Exposure / Risk Report covers DV01, VaR, Limits, and Stress Tests — all explained with full math and interactive sliders in your separate file: exposure-report-clean.html
Quick summary — the 4 components
ComponentFormulaWhat it tells youAct when...
DV01Open bbls × $1P&L change per $1 diff moveToo large vs limit
VaR (95%)DV01 × daily vol × 1.65Worst normal day lossAbove 80% of limit
Stress testOpen bbls × shock moveExtreme scenario lossLoss exceeds monthly target
LimitsAll above vs approved capsAre you within rules?Any limit above 95%
How all 5 reports connect
R-01
Position Report feeds everything else
Open volume from position report → becomes the input to DV01, MtM, and Capital Charges
R-02
MtM uses position + today's market prices
Open volume × (today's price − your price) = unrealized P&L. Flat price portion cancels via hedge.
R-03
Commercial Margin = gross diff gain − all costs
This is the realized P&L on closed deals. Costs reduce the diff gain significantly.
R-04
Capital Charges = inventory value × rate × days
Subtracted from commercial margin to get economic P&L. Holding inventory long kills returns.
R-05
Exposure = open volume × market move sensitivity
DV01 and VaR quantify the risk still sitting in open positions from R-01.
The End of Day (EOD) Report is the daily scorecard — sent to management at 5pm every trading day.
It pulls together ALL the other reports into one summary. It answers: what happened today, where do we stand, and what must we do tomorrow?
What the EOD report contains — and why each section matters
TODAY P&L
From MtM + realized trades today
Realized P&L (deals you closed today) + Unrealized MtM change (diff moved in your favour or against). This is your one-day contribution.
MTD P&L
Running total for the month — your score so far
Sum of all daily P&Ls this month minus capital charges. Compared against monthly target. This is what management tracks.
POSITION
From Position Report — are we flat?
Confirms all open positions and whether hedges are in place. Any unhedged volume is flagged for action tomorrow.
RISK
VaR and limit usage — are we within bounds?
If VaR limit usage is above 80%, management will ask why. Any breach must be explained and a reduction plan provided.
TRADES
Log of every trade done today
Time, counterparty, volume, price, purpose. Audit trail and transparency. Back office confirms each trade booked correctly.
TOMORROW
Action list — what must happen before you can trade freely
Unhedged barrels, nominations due, pricing windows closing, credit approvals needed. Non-negotiable daily tasks.
How today P&L is calculated — the exact math
Realized P&L today+$45,000(closed a spread trade today)
+Unrealized MtM change today+$127,000(diff widened $0.13/bbl × 1M bbls this session)
−Capital charge today−$18,230($83.2M × 8% ÷ 365)
Today's net P&L = +$45,000 + $127,000 − $18,230 = +$153,770
How MTD P&L accumulates
Yesterday MTD+$1,086,230
+Today net P&L+$153,770
MTD P&L = +$1,086,230 + $153,770 = +$1,240,000
Monthly target: $1,500,000 — currently at 83% of target with 3 trading days left
This is the live EOD dashboard. Adjust today's realized P&L and MtM change — watch the full EOD report update automatically.
Realized P&L today ($)
+$45,000
MtM change today ($)
+$127,000
Yesterday MTD ($)
$1,086,230
Monthly target ($)
$1,500,000
END OF DAY REPORT
CRUDE AMERICAS — 28-MAR-2026
17:00:00
TODAY P&L
+$153,770
MTD P&L
+$1,240,000
VS TARGET
83%
VaR LIMIT
42% USED
TODAY P&L BREAKDOWN
Realized P&L
+$45,000
MtM change
+$127,000
Capital charge
−$18,230
Net today P&L
+$153,770
$45,000 + $127,000 − $18,230 = +$153,770
TOMORROW'S PRIORITY ACTIONS
HIGHFind buyer for remaining 200k WTI May — unsold, capital cost running $3,646/day
MEDConfirm June pipeline nominations with operator by 10:00am
OKVessel "Pacific Star" loading May 5 — all nominations confirmed ✓