Would you get into commodieties trading?

With all this drama about the commodity crisis and the future projections of shortages, I'm getting more interested in learning more than just the basics of commodity trading rather than M&A or ER. Feels like the minimal amount we learn in business school and internships doesn't give a good picture of the opportunities in this field. For some weird reason, it seems much more exciting to trade oil, metals and all that rather than just pieces of paper to be fair


So anyone has a good take on the future of this industry? 

 

It’s impossible to predict on a long term horizon.  In 2019, everyone thought that volatility was dead because of US production response.  In 2020, everyone thought that peak oil demand was in the past, and oil majors as well as institutional investors embraced ESG.  In 2021, people thought that a new super cycle was in store for energy because US and OPEC were slow to respond.  In 2022, Russia invaded Ukraine (also something no one saw coming) and ESG has dropped off the radar.  Who knows what’s next?  I would certainly not put much stock in decade long assessments.

 

I agree with what others have said. You have to pick something because it genuinely interests you. Having said that, I always enjoyed commodities because of how tangible it is and the fact that commodities are what drives the world. Commodities are what feed us, provide energy that has allowed modern society to become what it is, and provide materials to allow us to build all of the infrastructure we have. If prostitutes are the world's oldest profession then grain traders are second. An interesting book just came out and you might enjoy it if you want to read more about the impact that commodities have on geopolitics, world history, empires, etc.

"Oceans of Grain" by by Scott Reynolds Nelson

 

Lots of good thoughts here but there's one big thing that still needs mentioning. If you are looking at a front office role in commodities and focusing on the actual commodity instead of companies involved in the space, its more macroeconomics than finance. Whether Exxon makes money drilling for oil is relatively immaterial, what matters is how much are they producing and what do they expect to produce over the next year, 5 years, etc. Same could be said for miners, electricity producers, and so on. 

If you like economics classes more than finance, it could be for you.

 
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