Energy Trading Challenge – Isaak Geisler

On February 28th to 29th five students from Lancaster University had the opportunity to participate in the Energy Trading Challenge 2020 hosted by ESCP Business School at the university’s London campus. The Energy Trading Challenge was a competitive team event where students from over 35 universities from around the world organised in 53 teams were able to showcase their skills and knowledge in a state-of-the-art real-time web-based trading simulator.

After arrival on Friday morning and an introductory session the first trading session started, where the teams were confronted with professionally crafted trading scenarios. On Friday and Saturday, there were two simulations respectively representing two full months in the energy industry. Students were required to trade with commodities futures given only a certain amount of risk (limits) allowed to be taken. The commodities included US and EU crude oil (West Texas Intermediate & Brent), heating oils (heating oil & gasoil) and different spreads (geographical, time and crack spreads), where one contract is traded for another. The aim of the trading challenge was to trade the futures of these commodities by evaluating the news feed and market developments (for instance when news about an oil shortage in the market is released crude oil should be bought as prices will rise). Consequently, teams tried to have the highest profit after the trading sessions as each of the four trading simulations was assessed individually.

A round-table discussion with leading figures from a range of sectors within the energy industry followed the six-hour trading session. The panel talked about recent events within the global energy markets and the challenges and opportunities in the near term. Different viewpoints between the invited speakers concerning the future of oil and the shift to sustainable energy made the debate extremely interesting. After the talk the students had the opportunity to interact with these professionals, who have worked for major trading houses, energy companies or governments, at a networking session that concluded the first day. The second day began with a review of the trading activities where professional traders provided insight and helped with trading concepts and techniques. Subsequently, six hours of trading followed. After the evaluation of the teams’ performances during the four trading sessions the five best teams were rewarded at a prize giving ceremony at the end of the second day This event has been an incredible possibility to connect with like-minded students, learn about commodity trading and gain valuable insight into the energy industry.

Many thanks to Lancaster University, specifically the Finance department, for giving us this opportunity. Furthermore, thank you to ESCP Business School, Glencore and Smart Global for hosting, organising and sponsoring this great event.