How To Become An Energy Trader?

by Usama Chaudry on May 16, 2022

The energy sector has been an important asset for boosting industrial growth. Over the past decade, it has provided several employment opportunities, including being an energy trader

An energy trader is a finance professional who manages the sales of valuable energy resources like gas, oil, or petroleum. 

An energy trader is expected to handle energy production and financial matters in such a fast-paced workplace.

If you love exploring market trends and want to work in a profitable industry, it may be the appropriate career path for you.

This article will give you detailed knowledge on how to become an energy trader, the job outlook, and the salary of this profession.

Go on reading till the end to grab the relevant information.

How Can You Become an Energy Trader?

Following are the steps for becoming an energy trader:

  1. Get a bachelor’s degree
  2. Try completing your master’s degree to compete
  3. Work in the field to get experience
  4. Create a strong resume

1. Get a Bachelor’s Degree

We have analyzed that the majority of successful energy traders have a bachelor’s degree. Energy trading requires an understanding of both financial trading and energy production. 

Choosing the right major subject is a very crucial step. Colleges offer many major subjects that can help you to learn energy trading basics. 

For example, a bachelor’s degree in business or finance can teach you the fundamentals of trading, such as risk management and market analysis.

Moreover, degrees in geology, engineering, and petroleum engineering are also preferred by some companies. 

2. Try Completing Your Master’s Degree to Compete

The concern is how to stand out in a highly competitive energy trading market?  We advise you to consider acquiring a Master of Business Administration (MBA) to become an all-rounder and competent applicant.

Many reputed energy companies prefer specializing in market finance, trade and logistics, commodities, and capital markets.

3. Work in the Field to get Experience

Regardless of your education, you need experience of at least one year to become a professional energy trader. Many companies mention that the applicant must have prior working experience in the relevant field in their energy trader job descriptions.

Working as an engineer in an oil refinery can better understand how the market works with the oil production process.

Seeking employment as a scheduler or a junior trader in logistics or finance is also helpful in learning skills.

4. Create a Strong Resume

Finally, you need to create a fine resume for a refinery operator position. It will showcase your specific soft and technical skills, mechanical knowledge and ability, attention to detail, and ability to work in a team environment.

 In your objective or professional summary, you can also highlight your knowledge of relevant refinery operations.

All these things can increase the chances of your selection.

What are the Roles and Responsibilities of an Energy Trader?

You might want to know what an energy trader does? Let’s dive into discussing the regular duties of an energy trader job.

Generating Profits

The primary goal of an energy trader is to generate a profit by buying or selling energy shares at a specified price. This might be energy in the form of natural gas supplies, petroleum stocks, or power grid electrical shares.

Managing Fuel Transportation

As an energy trader, you will have to make physical choices for fuel oil blending and delivery and make judgments to maximize time, mode of transportation, and costs.

Monitoring Market Trends

An energy trader has to monitor trends in the market to make smart choices. For instance, a contract with a 10% volume option will allow you to examine the market structure and determine whether to supply more or less oil to a party depending on future contracts or downtrend and price curves.

Energy Purchasing Decisions

An energy trader’s job is to predict future energy pricing by using computer software programs and other analytical tools, such as meteorological data. If there is a possibility of an increase in prices, an energy trader will purchase power shares at the current rate. 

What Skills are Required to be an Energy Trader?

To be a successful energy trader, a diversified set of abilities are required. The majority of which are technical and knowledge-based.

Here is a list of useful energy trader skills and competencies:

Work Efficiency

Those who want to pursue a career as an energy trader must work well under pressure on a trading floor and must make quick decisions.

Good Communication Skills

An energy trader must be able to communicate effectively with others to establish a united and quick response to market fluctuations.

Operational Management Skills

An energy trader must be familiar with the properties of the resources they’re dealing with, from product knowledge to storage and transportation requirements.

Easily Adaptable

An energy trader should be able to adjust to new information quickly. He must be capable of advancing his activities in response to the latest international news.

High Working Stamina

Trading floor shifts can be long and arduous, with common 10-hour, 11-hour, or 12-hour shifts. Those considering a profession in energy trading should be physically fit and willing to put in the needed hours.

What Kind of Industry Expertise Are Required to Be an Energy Trader?

These expertises are acquired through formal education or on the floor experience by an energy trader:

Awareness of Market Trends

An energy trader must be aware of market patterns and the behaviors that tend to follow them.

Monitoring effects on energy systems

The energy trader must be connected with current events and should keep an eye on weather patterns and worldwide political developments that could affect the market.

Understanding of risk management

An energy trader should be familiar with risk management techniques so that they can collaborate with consultants to protect the organization and set policies.

How Much Does an Energy Trader Make in a Year?

The average annual pay for an energy trader is $102,113. It can vary according to your educational background, skills, expertise, and experiences. Energy trader certification is a plus for getting a high pay scale job in the energy sector.

Frequently Asked Questions:

1- How does energy trading work?

The trade between power generators which produce electricity and power suppliers who sell it to customers is known as energy trading. Electricity is generated at power plants and then purchased by energy traders who then sell it to customers to meet their demands.

2- What is an energy trading system?

The Energy Trading System (ETS) is used to participate in the wholesale energy market. Market participants use ETS to enter energy supply offers and demand bids. Metering data, settlement, and billing are also included in the system.

3- Is energy trading a good career?

It is a good career path if you can work under pressure and have instant decision-making skills. This profession demands intellectual capability and physical stamina to work for long hours. Moreover, if you want to pursue a profitable career path, then this is a good option.

4- How do energy traders make money?

Energy traders earn profits by buying and selling shares of energy resources. Energy traders track commodity prices, forecast market trends, and changes, and make informed decisions on which purchases or transactions will yield the highest profit.

Conclusion

In a nutshell, the energy trading sector, like any other career, has its own set of needs and prerequisites. We hope you now have a thorough understanding of becoming an energy trader.

We have thoroughly investigated all of the conceivable concerns that anyone considering a career in the energy sector would have.

 We recommend that you get as much information as possible before deciding on a career path. Best of luck to you!

Usama ChaudryUsama is a professional engineer and graduated from the University of Alberta. Computations of electrical and thermal characteristics are among his research interests. Usama's hobbies outside of professional work include reading, playing tennis, and trekking.

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