Learn something new every day More Info... by email
An oil broker arranges contracts for the purchase or sale of crude oil, or negotiates future's contracts. In order to become an oil broker an individual must typically graduate from high school and complete an undergraduate degree program. Additionally, due to the nature of the work many firms require applicants for these roles to have prior sales or finance related experience. In many locations, someone wishing to become an oil broker may also have to pass a series of licensing examinations.
While the price of a barrel of oil can change throughout the day, transactions involving oil future's contracts are more complex because the sales prices in the transactions are based upon projections of future price movements. Consequently, anyone who plans to become an oil broker must have a good grasp of mathematics and the ability to process significant amounts of information within a short period of time. Many firms attempt to fill these roles with college graduates who have completed degree courses in finance, economics or related topics. Some companies even require applicants for these jobs to have completed masters or doctorate degree programs in mathematics related topics.
The trading of oil and other types of commodities is heavily regulated in many areas and anyone wishing to become an oil broker must attend a series of training classes during which sales practices, disclosure requirements and securities laws are taught. Generally, the process ends with an examination; prospective brokers must achieve a minimum score on this test in order to become eligible to apply for a trading license. The qualified applicants may then have to pass a background-screening test before seeking employment.
Successful brokers need to have strong sales skills; many firms prefer to fill these positions with workers who have previously worked in insurance, banking or stock trading. In many nations, oil trading takes place at commodities exchanges and only the leading brokerage firms and independent traders have the right to transact at these locations. Someone wishing to become an oil broker may have to spend some time working at another type of commodity exchange, as many investment firms only hire brokers who have previously worked in these types of environments. In the absence of such prior experience, someone who worked as an administrative assistant or sales associate for a trader may be able to apply for one of these roles.
Aside from academic credentials and experience, brokers often need to have certain other skills and attributes. Trading in many areas is mostly conducted online in which case some firms only hire people who have completed short-term computer training classes. Additionally, people who deal with oversees clients may need to have second language skills.