Over 20 oil traders in Asia switch jobs since mid-year

The unseasonal round of head-hunting in Asian oil and commodities trading firms that began some months ago as the market recovers, has gathered pace as more people switch jobs, trade sources said on Wednesday.

More than 20 traders have moved from one lucrative position to another since June, including the four senior traders who left their high-profile jobs three months ago, the sources said.

Some companies are expanding into new areas, reflecting that steady recovery after nearly a year of turmoil.

"People have been steadily moving about since the middle of the year," a Singapore-based Western trader said.

"The 20 guys are just the mid-level to senior traders. There are more people such as junior operations personnel and marketing staff who also moved around."

U.S.-based World Fuels Services, one of the world's top brokers for marine fuels, has set up a cargo trading desk for fuel oil and middle distillates and hired Yew Teng Leong, formerly managing director of Noble Group's oil trading desk, to head it.

"While there are still shops that are not doing well and some even closed, like Petro-Diamond's risk outfit, the general mood is that things are improving and there are more good news than bad ones," the trader added.

October was also the best month, in terms of volumes and profitability for some Over-The-Counter (OTC) oil brokerages in Singapore.

Hedge funds also hiring

The hirings were not limited to traditional oil trading firms such as physical traders and banks, but also hedge funds. These include London-based Saxon Capital [SAXN.UL], which hired Muwaffaq Salti, formerly global head of JPMorgan Chase's fuel oil trading team, to head its oil trading operations in Europe.

Physical oil companies are also growing -- Russia's LUKOIL will expand its business, particularly for fuel oil and naphtha, despite seeing departures of five senior traders for other firms, said Gati al-Jebouri, CEO of its trading arm.

One of its ex-fuel oil traders, Matthew Lim, has joined growing Chinese firm Brightoil Petroleum Holdings <0933.HK> as trading manager, while another trader, Ong Eng Hian, has joined the United Arab Emirates' FAL Oil as trading manager.

Norway's StatoilHydro also expanded its naphtha trading team, a year after shutting down its fuel oil and middle distillates desks, hiring Kunio Yokokawa from Mitsui Energy Risk Management (MERM).

"The musical chairs season has started early this year and I'm sure there will be more movements towards the year-end as people collect their bonuses and more companies decide to expand or scale up their operations to what it was before the slowdown," another trader said.

The movements in Asia reflected those in the United States, where the best traders are being wooed again by banks and hedge funds, after hundreds of commodity traders lost their jobs last year in the wake of the recession.

Despite the optimism, some traders remain wary that the recovery is not complete, pointing to stubbornly poor refining margins, reflected by weak diesel cracks that have hovered under $10 a barrel most of the year, well-below 2008's average of $15.

Another concern is the ever-increasing volume of oil products kept in floating storages, which has reached above 90 million barrels, with another 6.5 million barrels booked to join the fleet by year-end, ICAP shipping brokers said.

This posed a worry to the industry as winter has arrived and the cargoes must find homes eventually and could be sold at distressed levels, traders said. However, such activities have already yielded positive returns to players such as oil majors and big trading firms since the practice of storing distillates on tankers started in March-April.

Banks, who have also joined the bandwagon despite a lack of presence in the physical market, see this new market play as a lucrative opportunity, creating openings for professionals with oil financing and trading expertise, sources said.