Many experts, one joint goal.
Commodities markets are impossibly complex, and notoriously difficult to predict. Oil price forecasts are said to be the 'widow maker' of economist and traders alike. But there is a lot more than just the flat price. Predicting geopolitical events, weather patterns, shipping flows, consumer behaviour and margins for refining or breaking bulk can contribute to narrow down possible price change ranges and likelihoods. Brining experts from production, distribution and hedging together allows our swarms to deliver unique, valuable insights.
Our background is in oil trading. Having traded futures, options and swaps on crude oil and products across the barrel since the mid-90s, we have worked alongside colleagues who swore by point and figure charts, Market Profile, the importance on CFTC data, floating storage, marginal barrels - the list goes on. While factors that matter to price discovery change dramatically over the years, our ability to 'feel' what matters and what doesn't develops over time and adjusts to the varying inputs. Swarming a medium-sized group of experienced analysts and traders taps into this human experience and intuition and can delivery very powerful results if asked the right questions.
There are no holy grails or infallible oracles.
Prediction is hard. Some say, impossible. We agree wholeheartedly with the former, but find the latter simplistic and unhelpful. Everyone who has been in these markets for long enough knows that rigor in research and discipline in execution leads to results, but gains are hard to come by and are easily squandered. Groups of forecasters who help and motivate each other can make a real difference in delivering the necessary homework and avoiding low-conviction calls.
- Too many factors relevant for price discovery to cover by one analyst.
- Aggregation of forecasts leads to watering down of accuracy, mixes low conviction with high conviction.
- Swarms bring together diverse opinions in a social, stimulating cooperative setting.
- Extensive preparation and training.
- Proprietary post-session data analysis and calibration.