Trading internship interview at major oil company, soliciting advice
Have solid behavioral answers (why energy, about myself, greatest strength/weakness, etc) -- but have never had a technical interview before and my research indicates there will be questions such as "how to set up an arbitrage trade" and a full case study about how you'd move crude if refinery xyz is down. I don't really know the best way to tackle either of these questions.
If anyone had gone through this process and has some insight, it would be greatly appreciated.
Hey KingLime, I'm the WSO Monkey Bot and I'm here since nobody responded to your thread! Bummer...could just be time of day or unlucky (or the question/topci is too vague or too specific). Maybe one of these topics will help:
Hope that helps.
Going to assume the extent of any "arbitrage" trade isn't going to be too super in depth or technical and will probably just focus on the general nature of how to set-up an arbitrage trade which are below:
1.) Location - transport product from an area of low price/high supply to area of high price/low supply by means of pipeline/rail/truck/vessel etc.
2.) Time - put product into storage during times of low demand/high supply/low price and then remove from storage during times of high demand/low supply/high price
3.) Quality - take product and refine it into several different byproducts that net you a greater return than had you just sold the unrefined product outright (i.e. refining a barrel of crude oil into gasoline,diesel, jet fuel etc.)
I deal more on the NG side and I could give a detailed description of what you'd do dealing with pipelines but my knowledge of crude operations is unfortunately very limited. With any case study they give you just try and reason through it. It's not going to be rocket science and given the parameters they give you and the different options you have try and pick the best one that limits your losses. If a refinery is going down you're going to want to secure some sort of alternate transport for the product to another refinery/location or sell the product to another counterparty who can do so for you. Having optionality in physical commodity trading is key. The more options/assets you have at your disposal the easier it is to deal with unexpected problems or set up lucrative arbitrage opportunities.
Google Trafigura’s physical trading guide. I had everything they expected me to know when I interviewed at the major oil trading shops.
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