Oil traders are hot property as banks chase the action
September 14, 2004
By Daniel Rook
London - Oil prices are near record highs on world markets, and banks and hedge funds are scrambling for a piece of the action, making oil traders among the most sought-after workers in London.
Banks expanding their energy trading teams include Dresdner Kleinwort Wasserstein, ABN Amro and Barclays Capital, which are taking on the traditional heavyweights such as Morgan Stanley and Goldman Sachs.
It's good news for experienced oil traders, who can typically expect an annual base salary of between £90 000 (R1.05 million) to £130 000. Then there are the bonuses, which can be several multiples of the base salary.
The work can be hard, the hours long and stressful, particularly with markets so jittery at the moment.
Oil prices reached all-time record highs - near $50 (R325) a barrel - in New York last month.
Since then prices have come off the boil, but concerns about the security of supplies from Iraq, Russia and other major producers, coupled with burgeoning demand, continue to make for volatile trading.
For speculators, any price movements can be an opportunity to make a profit, so long as their bets pay off.
"The oil traders are doing extremely well at the moment," said Commerzbank energy analyst David Thomas.
"Those who managed to call the market right have made a fortune as the institutions they work for will be paid very handsomely, I would imagine."
But rumours that any old oil trader can command a million-dollar "golden hello" were wildly off the mark, said Trish Collins, the head of the Exchange Consulting Group, another recruitment company.
Nevertheless, Collins agreed that banks were expanding their activities in a range of commodities, not just oil.
"I think, definitely, the banks are looking at how they can access the commodity business as an asset class across the board," she said.
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