Crude oil is a vital raw material traded on commodities exchanges such as the Chicago Board of Trade. Oil brokers, also called oil traders, are commodities brokers who specialize in trading oil securities. An oil broker does not simply speculate. Her responsibility is to use her expertise to manage the risks of trading oil on behalf of her clients.
According to the Bureau of Labor Statistics, oil brokers fall into the category of securities and commodities sales agents. Many start out as interns when they near the end of their college education. An oil broker must develop a thorough knowledge of the energy industry in general and oil markets in particular. Oil brokers track market trends and industry developments as well as influences such as the government policies of oil-producing nations. An oil broker consults with clients and executes trades on their behalf.
The average salary nationally for commodities brokers, including oil brokers, was $95,130 in 2010, according to the BLS. Salaries for the lowest 10 percent averaged about $31,000. For the most part, these were individuals in entry-level positions who had not yet built up a client base. At the upper end, the highest 25 percent of paid commodities brokers averaged about $124,000 per year.
Salaries for oil and commodities brokers vary considerably from one region of the country to another. In financial centers such as New York City, brokers averaged just under $130,000 per year. In nearby Connecticut, the average was even higher, reaching nearly $158,000. However, Salary Expert says that commodities traders in Phoenix averaged about $60,000. In Miami the average was about $70,000.
To become an oil broker, you need at least a bachelor's degree in business, economics, accounting or finance. Many employers prefer a trainee with a master's in business administration. An MBA or professional credential such as a CPA license often is required for promotion. Much of an oil broker's training is carried out by employers. Trainees study subjects ranging from public speaking and sales techniques to securities analysis. You must be registered with the Financial Industry Regulatory Authority (FINRA). To qualify for registration, you must be employed as an entry-level broker for at least four months and pass the Securities Registered Representative Exam.