Oil vs Gas vs Power - Which offer to take?
Fortunate enough to have an offer for all three:
- Oil / Products Scheduler at a large refinery (Valero / Marathon / PBF)
- Natural Gas Scheduler (top marketer and another at midstream player)
- Real Time Power Trader (Asset Driven Shop)
Having a hard time selecting what shop to go with based on the commodity. I have spoken with traders from each niche and they all seem interesting. These are my impressions (likely wrong) for each:
Crude / products seems largely relationship driven and lends itself more towards the physical side as you have different specs and curves - I believe I would enjoy learning about refinery mechanics and specs, talking to people on the phone, and chartering ships for export if I ever got the chance at a different shop. This role involves barge, ship, rail, and trucks. This commodity is really what got me interested in the phys trading world in the first place.
Nat Gas seems fairly physical in that there is a huge logistical component in understanding the maps of intra & interstate pipelines, storage areas, and being able to identify locational spreads. I surmise scheduling would involve finding creative, low cost routes and talking to pipeline reps and counterparties on deals and noms. I get the sense that depending on the shop it can be more or less intense and can be quite stressful with the nom deadlines. Honestly seeing the demand for schedulers and talking to traders (especially about Uri), it seems exciting. I guess the route here lends itself more towards spec / financial - scheduler to cash trader to term trading.
Power, like nat gas, is fairly weather driven but is definitely the least “physical” of the bunch as you’re just moving electrons on the grid. Each market / ISO has its own set of nuances and though renewables are exploding and incorporating some volatility into the market thermals are here to stay as they offer reliability. The RT role - as with many shops - will be fairly operational and focus more on asset management and taking care of DA positions in RT. I guess the path here is RT —> cash / DA —-> term ? (There’s also congestion / FTRs but I’m not that smart). Probably also the fastest route to having real P&L and will grow a lot in the coming years.
All in all, these are my limited views and I’ll add that I’m not quantitatively inclined (I’m certainly grinding through some coding but not a guru in it yet). For those in the industry, which path would you recommend taking if you want to maximize learning, opportunity or growth? Is it easy to move across commodities - let’s say I do power but want to go into gas scheduling or vice versa?
Can't really give you advice on all three, but I am an incoming Gas & Power trader myself, and my thinking is that power markets especially are going to be exciting for the next couple of decades on both the supply and demand side (this is bit dependent on EU vs. NA I guess); data centers, EVs, retirement of coal, renewables, nuclear coming back, etc.. There are so many unknowns that will be realized over the coming years that there is probably volatile times ahead, which means money to be made.
I'm sure people closer to oil and gas could make very similar cases for them, but those are just my 2c in terms of the power oppertunity.
Overall, I would probably say that going with gas gives you the easiest switch -- atleast going from gas to power is fairly common, and I would imagine going from gas to oil is not unheard of but probably less common. Oil to power or vice versa seems very rare.
Based on the most helpful WSO content, here's a breakdown to help you decide:
Oil/Products Scheduler:
Natural Gas Scheduler:
Real-Time Power Trader:
Key Considerations:
Recommendation:
If you're passionate about logistics and the physical side, oil scheduling could be a great fit. If you're drawn to dynamic markets and want a faster path to trading, natural gas or power might be better. Between gas and power, gas offers a balance of physical and financial trading, while power provides quicker P&L exposure and growth in a rapidly evolving market.
Ultimately, choose the role that aligns with your interests and long-term goals. If you're unsure, consider which commodity excites you the most and where you see yourself thriving.
Sources: Entry-Level Natural Gas Scheduler, State School to Trading Physical Gas My Story (Long), Oil vs Nat Gas Trading, Q&A: Gas Scheduler to Gas Trader, Oil Scheduler/Operator positions requiring experience?
Honestly if you're looking to maximize comp, power would be the best bet imo. It's the most liquid and easiest to transport (electricity theoretically travels at the speed of light) and it has decent volatility where you can find arbitrage opportunities. It's the most similar to financial markets. Also commodities firms are notorious for not giving you a trading seat. So if you're dead set on becoming a trader, go with the trader role, because they'd rather keep you in ops rather than retrain you to be a trader, despite most of the successful traders having a background in ops. There are very limited seats, and there's a long line ahead of you.
Most succesful traders absolutely do not have a background in ops in gas and power lol
Which background do they have then
I work at an oil major, all of the high performing top traders and originators I met had a background in ops and understood the supply chain cold. Energy is not like financial markets, it's heavily impacted by the supply chain.
Not OP but interested in how difficult a move would be from power to trading gas given that managing thermals requires at least some tangential exposure to gas (procuring the fuel at economic rate).
It's 2 completely different markets that operate on 2 different rules. Power you have to deal with ISOs, gas you have to deal with pipelines and actual production of it. Yes power is highly dependent on gas, but power can be generated by many other means.
Physical anything (oil/gas/power) will be more difficult to move between assets. Gas and Power will be the two most easily interchangeable, especially on the financial side. There is a lot of overlap between the two. Ive seen two cases in my career so far switching from oil to gas and gas to oil and both were purely financial spec trading roles. I myself have gone from physical gas ops and trading to eventually financial power & gas. I wouldn't say the path I've taken is "typical" but is certainly possible. Most power traders I know trade gas as well in some capacity.
Would you recommend starting with gas scheduling or real time power? Both markets are linked so seems like a harder choice.
I'd start with whatever offer I was able to get, at the best shop possible, with the most learning opportunity/development. It's pretty hard to recommend one over the other in a vacuum. Do you like gas or power markets more? If you have no preference i'd go for the best shop possible. Is the scheduling role letting you trade cash as well? Is there room for eventual development into term trading if that's what you so wish? Same thing on the power side is it at a shop that looks to develop their RT traders or are you just filling an empty spot with no further developmental opportunities? Which team do you think you'd feel most comfortable working with? They're both entry level roles that can either be good first steps or not it's really shop and team dependent.
I have experience in power/gas. Traded RT and came off desk to trade short term, then switched and scheduled gas and now trade gas.
I personally prefer gas, I like the timeline the physical runs on and also the ability to trade gas a variety of ways.
There is no question about it IMO, RT work sucks, it is also a toss up of whether you can move up on that desk. Check the profiles of the traders at the shop and see if they rose through the ranks in house or came from somewhere else. If either offer is at a merchant, I’d admittedly be hesitant. The name is great but if you look at the guys trading at these shops, next to none of them started on their real time desk or scheduling gas for them.
Feel free to drop me a PM.
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