Artificial intelligence has been making inroads into the oil and gas industry for a while now after the industry realized all the benefits it could reap from the deployment of these technologies. Now, it has begun changing oil and gas trading as well.
For now, the space of AI-enabled energy trading providers is relatively empty. One notable recent addition to it was OilX, an oil tech startup that provides traders with real-time oil analytics based on a combination of satellite tracking data and reports from various official organisations, including customs, JODI, and statistics agencies.
Thanks to AI, the OilX platform can process and offer traders a lot more comprehensive and hence more reliable oil fundamentals datain a fraction of the time traditional oil supply and demand analysis takes.
As OilX’s chief executive Florian Thaler told Oil price, “Theoretically, AI-enabled solutions can be found everywhere in a trading organisation, from front to middle to back office in trading operations. Ranging from analytics, trade execution, risk management, HR. We believe that the change is coming from a series of small, highly focused and specialized solutions which – when put together – form a comprehensive solution.”
Digital newcomers will continue to draw on the established expertise of the energy industry to come up with better trading decisions rather than trying to confront and overpower it.
"Price suggestion has clearly become a key factor [for AI] where for large trades and complex derivatives it used to take a while to price trades," a senior Citi executive told S&P Global Platts at an industry event last November.
AI is already helping traders make better decisions based on price forecasts made by the algorithms, Sandeep Arora said. And it goes beyond just price forecasts. Artificial intelligence is also being used to help humans learn how to better predict prices.