Crude Oil trading at big oil exit opps

Not super sure on which forum so posted it here.


I have an offer for oil trading 1 year industrial placement at a big oil company (market cap>$100Bn) in London. I was wondering if it's common for people to move from a trading floor at an oil company to other trading floors like HF, S&T etc.

Is it well respected? How similar is it to S&T?

Also what is salary progression like? When i look on glassdoor it seems like it doesn't grow fast beyond $120k.

 

Why would you want to exit from a job paying an absurd amount of money with great hours? Trading at a major oil company is the end goal. If you end up running a desk your pay is in the millions.

It has very little to do with S&T for the most part. There is a big difference between buying/selling derivatives for customers and making sure a vessel filled with crude gets from Africa to Europe on time, is hedged properly, meets all the spec/timing requirements of the refinery you're sending it to, and you still make money on the deal. 

 

Curious to know how many people actually make it from the TDP to into the seats where you can earn millions.  Is it less than people who make it to heads of desks in S&T?

 

The number of seats in physical in very limited. The TDPs are as competitive as any S&T desk you want to get on. Heck the Shell TDP needs you to work for 2 years before you can even apply to their program. So these are a bunch of competitive guys who wants to get into trading. Within this batch of people you need to not only be good but also have the "people" skills to get promoted. At a major you will not get promoted to desk head any time soon. you need to have a consistent record and be lucky to move to such a position. I think a physical desk head can earn a lot more than an S&T desk head. But its not a given.

 
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Not sure on the statistics so this is just me speculating.

Out of undergrad I had the choice of going into S&T or the physical commodity route and I picked physical. My thought process at the time, which I think turned out to be correct, is that going the physical route offers a lot more optionality to your career (imo optionality is everything) and offers you a lot better learning experience. If you wanted to learn about how groceries at the store are priced would you rather go work for a grocery store or a consulting firm that the grocery store uses from time to time?

The skills you learn at a physical trading job can get you a job in S&T someday if you really wanted to (assuming you learn about the paper side of the business). Skills you learn in S&T will not necessarily get you a job at a physical shop one day. In S&T it is all about derivatives. In a physical job the derivatives used to hedge your risk are just one aspect of the job that you learn among thousands of other things. This idea was also conveyed to me by a guy I knew at a large bank working in their S&T group that was working hard to get a job on the physical side after a couple years at the bank.

I think it is easier to become a head of a physical desk than a desk in S&T. Not necessarily at an oil major but just a physical desk in general. The main reason being there are many more types of physical commodities in the world than there are derivatives that banks deal with. Ever heard of millfeed? DDG's? Soy hulls? Benzene? Liquid caustic soda? Styrene monomer? Every one of those products is going to have a desk head at the company they're at that trades them. Are they all going to be pulling in multiple millions each year? Of course not, but they are all very, very well paid positions that offer a great living. I worked for a guy before that was trading refined products in a pretty small volume niche market for a small physical trade shop. Not a big player by any means but he still had his Ferrari that he drove to work and his lake house on a spot he loved. Took off everyday at 1:30 when the market closed. Might not be 10 million a year but it is hard to beat and there are thousands of those gigs around the country if you're willing to look.

 
Rotterdam

If you wanted to learn about how groceries at the store are priced would you rather go work for a grocery store or a consulting firm that the grocery store uses from time to time?

false equivalence

 

Are they the exact same thing? Well, no, that is why it is an analogy. Guess you got your feelings hurt? Let me rephrase it for people like you: If you want to learn about trading commodities you are better off working for a company that buys, sells, and processes physical commodities than you are for a company that provides services to those companies for one aspect of the daily operations.

 

On your current situation, would be good to clarify a few things before you decide.  First, what is “oil trading industrial placement”?  And also, market cap of oil company is not always a good metric for skill development or exit opportunities.  Some of the largest ones (ie most of them besides BP/Shell/Total) are just marketing their own production or running feeds into their own refineries.  Glassdoor compensation is useless for trading roles in general.  Who is going to pull in a 500k-10 mil bonus and post about it on Glassdoor under their company name?  What would be the upside for a person to do this?  Lastly, in general, the well respected oil majors are excellent experience for trading roles into hedge funds and private traders.  Not really any cross over into banks though as most banks are not physical traders.  Hedge funds are active at the moment.  Can tell you from personal experience that there are probably ~2 recruiter reach outs per month for roles for the past 2 years though this is likely due to me being in crude (the most liquid commodity) and to the strong hiring at the moment and probably won’t last.  But I’ve heard from friends that products is also quite active.

 

depends on type of hedge fund, if you're paper trading derivs or smth then a macro fund that deals with that might be doable but something like L/S isn't.

Look into trading houses?

 

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