Is Oil still King?
Hi everyone,
Title says it all. Recent grad I have past the last 3 months applying here and there to break into Commo trading. The thing is I have always been more interested in non-ferrous metals. So, I focused a lot on the job offers towards that segment. Unfortunately, shit happens and all my application in metal trading were rejected.
To cut it short some weeks ago, I threw an application for a job as an Assistant Oil Trader (Physical). The process went on quite well. And I am currently considering their proposition. It not a big comp like Glen or Traf but the team seems top. If good, I could get involve in different projects, develop my skills with python, yada, yada. From the info I have so far, I feel like it could be a good stepping stone.
Now this being said, I wonder if to get into oil trading, in 2021, is worth it — considering that policy-makers want it dead ASAP, the volumes traded may go down, the price may also (keep) go(ing) down because Renewable are getting some traction.
-What are your views?
-Are the skills that I am going to get in trade lifecycle management, pricing, hedging strategies etc. could be easily transferable to other commo?
I have often read that in commodity when your start with a product x, you tend to specialise and stick to it.
Cheers!
Yes it is - it still runs the world. Many people think it’s quickly on the way out but many people who hold this belief don’t truly understand the role O&G play in the world. We don’t have renewable energy that’s anywhere close to the level needed, much less a viable transportation/storage solution. I’m excited to see the energy transition but at the same time I’m realistic and realize that literally everything around us requires natural gas/crude to produce and the infrastructure needed for energy transition is no different.
With that said, I personally wouldn’t be a trader just because it doesn’t peak my interest. Also technology grows exponentially so despite the fact we are far from 100% renewable, there is no doubt it will most likely be a snowball effect.
I have a number of childhood friends who trade down in Houston and they have made an absolute killing and will most likely be getting bonuses that blow my IB analyst bonus out of the water this year (many of the trade desks hit their annual quota in February due to the winter storm).
Yes you’re completely right, I am probably missing the bigger picture— how important oil still is for our economies and how technologies for Renewables are not optimal yet to enable a complete replacement.
The work is in Switzerland but I hope to follow your childhood friend example and eventually make it happens for me too over here.
Thanks for the input.
Lots of skills you learn in phys oil trading will transfer to “renewables”. While Oil will be around for a while you are correct to worry if in 5 years it would be like how global coal trading looked a while back.
Makes complete sense, thanks Marcellus.
I think coal still has its merits - Glencore thinks so too.
Not sure they see merit so much as a huge position they would like to unwind as painlessly as possible.
are the skills also transferrable to metals?
Is it true thats its ultimately just about relationships anyway?
If you are a son of Russian minister of natural resources and environment, your uncle works for Glencore, or if your father owns emeralds mines in SA then yes, it is all about relationships and networks. Otherwise, I think it is a mix of capabilities to make money, knowledge, hard work, specialization, and luck. Why would one who is successful in oil trading and is making every year millions of dollars in salary and bonuses + other perks want to switch to metals and start from scratch?
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