Energy Trading / Commercial Analyst Programs
I've read through all the topics related to energy trading roles, and I know that you have to start in ops/scheduling before moving on to become a real trader. However, my background (chemical engineering major) isn't really suitable for obtaining a scheduling role at one of the majors. I know Conocophillips had a 2-yr analyst program that encouraged engineering majors, but I'm not sure what will happen this year after the COP/PSX split.
Do you know of any other programs like this one, specifically for engineers? Also, is it possible for me to transition into a trading role after spending 2-3 years as a refinery process engineer? I have internship experience in supply-chain/logistics/planning on the petrochemical side, so I have a fair amount of familiarity with the industry. Do you know any engineers who are in the commodities trading business?
Thanks!
Here's your path: Process Engineer (2 years) -> Gasoline Blender / Light or Heavy Products Planner -> Analyst / Junior Trader / Scheduler in trading office -> Trader
Do 2-3 years in Process Engineering then beg to get moved to the Economics and Planning group as quick as possible and move from there.
Thanks so much for the reply this is what I was looking for. Right now I'm looking at a probable return offer at my company where I could move to a feedstock optimization/procurement semi-trading role for naphtha/NGL's in 3-4 years, but we're not actually allowed to trade. I saw one of your previous posts... are you in BP IST right now, or are you doing the process engg path you mentioned? Unfortunately I go to an east coast school so I'm having trouble even getting my resume seen by the Houston area companies (I really had to try to land my current internship :/). Any tips would be appreciated. Thanks!
Haha I'm actually doing neither. I'm currently a drilling engineer working in the Gulf of Mexico, out on the rig right now actually. Still looking for opportunities to move towards phys oil trading this recruiting season though.
Scheulers/Traders come from all groups of life. Scheduling is not rocket science. Your background would fit well with the role, just show you sociable, not a douche and willing to work hard.
Any major has a program like you described which you could apply to.
Yeah that makes sense and I would love to do that. But at least when I talked with XOM (which has a trading presence in its Fairfax office) they seemed unwilling to start out an engineer in a scheduling role since they consider it a loss of engineering talent. They would have me put in my 2-3 yrs in a refinery before I could work on the trading floor, and it is not a guarantee since you are considered an engineer not a "trading/scheduling analyst." This is why I was wondering if you guys knew of more structured programs where you can express an interest in a trading role earlier on.
I will watch out for the programs this Fall cycle hopefully something good will show up.
XOM, is a very bad example they do not have a real trading arm. That company is run by engineers for engineers. I would rather be an engineer at XOM than any role of the hedging/trading/procurement, upside for engineers and pay is tremendous. Same goes with XOM's treasury arm.
Shell, BP, COP, Hess, Chevron etc have dedicated trading arms that are out to make $$$ and speculate.
Chem3: Nice. Are you on a 2wk on 2wk off rotation? What made you decide to do upstream (other than the pay).
Marcellus: Thanks yeah that's what I've heard too but XOM is the only one that recruits at my school so I haven't really researched the others too much. The other reason I'm interested in a development program is that they tend to match the salaries of engineers at the firm... I definitely gotta look more into it.
Yeah I work 2/2. I'd been trying to break into upstream since junior year and I finally got an opportunity during full-time recruiting. I've always had an interest in O&G growing up in a town that was built on oil. Goal is to start a small independent operating company that essentially owns percentage stakes in various producing wells. Might that expand idea into doing some drilling for equity as well.
Oh yeah there's a lot of opportunity for that in TX. One of my co-workers' owns some property that they discovered oil under and they had some drilling companies set-up shop there. They found 1MM Bbl oil and also some natgas apparently but it was so far down that they only had the technology to extract it profitably starting in 2012. Pretty crazy stuff.
BP has a pretty strong supply & trading program but look for informal positions (i.e Commercial Analyst, Scheduler, or Operations) at Citgo, Shel/Motiva, Hess or Chevron.
Engineering -> energy trading (Originally Posted: 03/12/2014)
Hello all,
I am a junior in chemical engineering with 2 engineering internships at a top 10 F500 firm + some programming skills. I am interested in the intersection between energy and finance and want to make a move to energy trading. I have never taken any finance courses before but try to learn as much as I can online.
many thanks
Yes, very possible, engineering is a great foundation for trading. I made that exact jump. You'll be well suited for options. Get the level 1 CFA done (no need to go further than that). Network, etc.
If you can take some sort of finance minor or diploma outside your major / school, you would be a perfect candidate for a major oil trading house. Don't worry about compensation.
and yes, you'll travel a lot, this business is about relationships
Does anyone have any more to share with this? OP were you able to make the transition? I'm also in the same position looking for an intersection between energy and finance
Yes, very possible, engineering is a great foundation for trading. I made that exact jump. I was an engineer for roughly 4 years in upstream midstream and downstream. I took some energy finance courses bombed a couple of interviews and was finally able to land a role as a power trader. My experience is that engineer's minds are always highly appreciated. Just try your best to network and get to know people. I can't tell you how many traders and recruiters I've reached out to, well I can but I rather not. You'll be well suited for options, work hard! It is a very fulfilling job.
1) Grad programmes at majors/trade houses. Expect to start in operations/risk/analysis for a few years, with no guarantee of trading. In my opinion the best way to get to a trading house is to start off at an oil major on one of their trading programmes, again no guarantee of trading.
2) Starting salary varies but grad programmes tend to pay a bit less than banks S&T at first, this spread appears to decrease over time, nevertheless if you make it as a trader you can expect to make good money, obviously the stories of making millions are the exception rather than the rule. The companies you listed aren't known for taking on swarms of graduates so be aware of that, and if they do again no guarantee of becoming a trader.
3) Trading in general is a very niche area but physical I like to think is a bit different. At the right company you will gain a wide range of commercial skills, managing logistics, keeping an eye on planning and working with customers gives you a pretty entrepreneurial skill set.
4) Down the line you will visit customers, its a customer orientated business - although I feel like the expectation of travelling is over done a bit on here, but you tend to travel more as you're more senior. Everyone's experiences will have differed. I have visited a few customers and been to several customer dinners and events, but I'm rarely jetting about every week.
A quick tip: Make sure you are clear on the difference between physical and non-physical trading. They are very far apart.
Energy Trading Background (Originally Posted: 08/03/2013)
What background/major do most Energy Traders have? Do they have majors in petroleum engineering or something, or do they have a major in finance?
you see both. many shops now have graduate training programs so some traders are coming right out of school into those. other traders came from other areas of the business, some were engineers but definitely not all.
This depends on the type of energy trading they are doing (electricity, natural gas, oil, emissions, etc). I would say its is probably 60% engineering (all disciplines, not many schools have undergrad petroleum engineering majors) and 40% finance. The reason for this is most of these energy companies hire large amounts of engineers and allow talent to move based on the talents interest. Most importantly though the traders should have the capacity to learn how their pipeline, generators, etc operate. This is essential to learn due to the volume of day head, peak and off peak scheduling and planning.
I agree with gctrader's post. I work at a energy trading firm and it is a pretty good mix of engineering/quant and business/econ types. I have found that one personality or background is generally better for the modeling side of tradings where as the other is best suited for the OTC trading that involves building and maintaining relationships.
Mix of engineering and business majors.
I will echo the above comments. I interned on the trade floor for a public utility this summer. Most of our quants were engineering types while the traders were typically finance types. Just a guide and not a rule.
Commodities/energy trading (Originally Posted: 12/26/2011)
Just recently started posting, and definitely loving the feedback and info from members.
I am currently an engineering grad student at a target school, and looking to break into commodities/energy trading. Have a unique work background, and a MBA. With that said, would love to chat with some folks who are currently in the field to get more perspective and opinion. What have your experiences been like at Glencore/BP/Shell/Trafigura/Cargill, etc? Thanks!
Trafigura... not that good of an experience (Stamford office).
What state are you graduating school from? Engineering.... MIT or a Southern Cali school? What other program do you consider target? Carnegie Mellon, Georgia Tech, etc'?
You have an undergrad, an MBA, and are pursuing a grad level engineering degree? For these type of roles are you not "too overeducated"? I feel like people will judge you to be more on the academic side than the trading one.
what are you looking to do?
Glencore is very solid.. their Asia deadlines are starting to come up though.
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I come from a military background, so I am definitely not academic at all. So far, nobody has said too educated. Just have to get in touch with the right folks to get the process moving.
Monty, I want to do FO trading, similar to what those firms have to offer (BP especially comes to mind). Want to learn from the bottom since I think that's the right way of doing it given how much there is to learn. Looking for an internship for next summer and going from there. Any advice?
All top shops, all good places to start. Not a ton of places are hiring, so would say if you get in to any of those be happy and take it.
all those places are hiring but all are also pretty tough to get into. I would lose the start from the bottom thinking and get the best job you can.... look at phy desks at you can get up the curve faster and may be more open for someone with no exp
Thanks for the info fellas. Monty, would it be worth it for me to make a run at energy rodeo?
if you want to hear about a lot of energy focused careers and talk to people one on one... i would be there
Do you have an idea of what you want to trade? Most shops dabble in both but keep in mind that there is a whole world of commodities beyond energy (grains, softs, etc).
I agree with Monty, focus on making it to a desk. Any desk. Learn the ins and outs of your product. No one becomes a physical commodity trader in a year or so.
Blender,
Crude or Nat Gas are what I am thinking, but metals are interesting too. From what I understand, 1-2 years usually doing scheduling or traffic before I actually become a trader.
Besides some of the bigger firms like Glencore, any "boutique" type firms I should think about? Thanks for your help and happy new year.
I'd say 2-3 years + more than 1-2. bos, look into Traf, Mercuria, Gunvor, etc. There are smaller shops too but much harder to get in.
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