Is Oil trading over?
Just finished my MBA (Harvard/MIT/Stanford), I did my undergrad in Econ & Polisci at Penn.
I have 1 year experience in the foreign relations sector, and 1 year of experience at a global macro fund. In Ugrad i had 1 internship at a macro fund and 1 internship at IB boutique.
I got the following offers:
1- FX Sales at BB
2- Oil Trader (BP/Glencore/Shell)
3- Consulting (Deloitte/McKinsey/Booz)
4- a bunch of diplomat/political positions that I'm not interested in
I'm not interested in FX sales, im not interested in consulting
I'm interested in trading.
However, I can't help but think that the peak days of Oil Trading are over, and that oil is a declining industry.
is there any truth to this?
how could oil be a declining industry? The world relies on oil and will not find a suitable replacement for many years.
troll
Why not take the only position that interests you? Oil would have to decline mighty quickly for it not to be worth it.
2
how exactly is oil a declining industry? oil will be an energy stable for the foreseeable future. If you're talking about trading itself, that's a different question.
I am interested in this question as well. I am only a student, however, so the below is merely a theory.
As oil supply declines such that there is no buffer between demand and supply, every little demand spike and supply shock will go 100% to increase volatility. Thus there would be more room to make money for a skilled trader, no? Wasn't that how Marc Rich made much of his money - by locking in lower prices prior to price spikes? I believe in the King of Oil he said that (paraphrasing) seeing the big picture and what's coming round the bend so to speak is how you really get wealthy trading.
My concern wouldn't be the decline of oil and the volatility of the market but rather cutting my teeth in a thick market against thousands of individuals with more experience and long-established connections. You might look for a market that is a little less competitive. But I am just spitballing.
we have plenty of supply for the foreseeable future especially in light of the increased yield from new techniques. The volatility of oil has more to do with perceived short-term supply vs demand. Geopolitical risk and demand for commodities linked to economic development are what tend to move the price the most. I was looking at oil the other day and WTI was backwarded from the fourth month out, pointing to oversupply issues.
The fact that we don't manufacture anything has to be bad for oil.
It is the very opposite of dead.
Ok, since people keep replying I will try to respond with something more helpful.
First rule of oil trading at any of the 3 shops you mentioned is that you will not be trading financially and you truly do not give a crap where WTI/Brent/etc is...Physical oil trading at a shop like that is about relationships, assets and very specific things on a micro level or specialized contracts. If you are looking to trade oil like a macro hedge fund does you are in the wrong place. Crude desks at those shops are printing $$$ cause you hold certain assets and refining margin are stupid high.
Also WTI is pretty much always backward-dated...it should be.
This
The answer to your question is "no". The rumours of the death of the oil trading industry have been greatly exaggerated.
You have 0 energy experience and 0 trading experience and got an offer as a trader at those places? Yea, that didn't happen. Also, what marcellus said about the type of trading done at those shops is spot on. Although the crude do take on some big financial positions for flat price expo occasionally but that is becoming less common.
Oil will not be dead in our lifetime. For you to be offered a FT in trading with 0 experience is highly unlikely (HYPS or not). If I were you, I would take Oil at Glencore. Oh, and before you step onto Glencore's trading floor, read The King of Oil and Metal Men to wrap your head around Marc Rich if you haven't already.
Do you have any idea where I can find a pdf of Metal Men?
http://lmgtfy.com/?q=filetype%3Apdf+%22metal+men%22+marc+rich+copetas+p…
2nd link.
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