Kilburn's Corner: Pouring Oil on Troubled Waters
When it comes to oil, knowledge is power
![fayekilburn2 fayekilburn2](/sites/default/files/styles/landscape_750_463/public/import/IMG/359/286359/fayekilburn2-580x358.jpg.webp?itok=oft-N8Df)
So absurd was the notion, that Alex Salmond, ex-leader of the Scottish National Party, was willing to wager Scotland's entire future economy on sales of North Sea Oil. At the time of the Scottish Independence referendum, he assured voters that the North Sea would generate £20.2 billion for the country in its first three year alone.
Since then, the price of Brent crude oil has collapsed to less than $50 a barrel and a third of Britain's North Sea companies are reportedly close to going bust. What's more, it has been estimated that the crash would have wiped £15.5 billion off of an independent Scotland's books, meaning that if Salmond had gotten his way, he would now being staring down the barrel of an economic black hole.
As a survivor of January's Snowmaggedon in New York, I can offer personal testimony that demand for fuel is not low, and indeed, last week Goldman Sachs released an analysis paper effectively confirming that the cause of the crisis was an excess supply of global oil. The report also predicted that oil prices will remain low for the foreseeable future, as supply continues to outweigh demand.
But in market data, the story is a different one. Demand for pricing data on oil, and indeed other alternative energy markets, is far outweighing supply, though here at least, vendors are trying to redress the balance.
Take, for example, Tullett Prebon Information, who last week signed data distribution deals with commodity brokerage firm SCB Group and independent commodity supply agent Numerco, to provide customers with biofuel and nuclear fuel data.
"The good thing about providing data is you're not concerned about whether price is high or low. When markets are volatile, information is needed to add clarity," says Frank Desmond, chief executive of TPI.
This week I also spoke to Campbell Faulkner, chief data analyst at over-the-counter energy and commodities broker consortium OTC Global Holdings (OTCGH), who believes that market data providers have played a vital role in bringing transparency to the energy markets.
"It's not to do with the futurization of swaps or the exchanges. The reason its better is largely because data providers like Argus and Platts publish known quantities of market data. That's not to say they are fixing the market, but they have filled a vacuum and I think it's greatly increased transparency across all the markets," Faulkner says.
Faulkner's point is one I always come back to when discussing the importance of market data. It's the reason the industry pays $25 billion a year for information. Because knowledge is power. Market data is the cornerstone of a liquid and transparent market, and that's especially true when it comes to oil.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Ace high or busted flush? Digital Asset’s mixed fortunes mirror DLT adversity
The vendor hoped to remodel post-trade using blockchain technology—and it still might—but its bumpy progress raises questions over the future of DLT in finance.
AI could cut time for money laundering checks by 99%
Leading crypto exchange rolling out large language model for enhanced due diligence checks.
Standard Chartered keeps faith with quantum experimentation
The bank is aiming to future-proof itself with the ability to adopt new technology at an early stage.
Waters Wrap: CME, Google and the pursuit of ultra-low-latency trading
CME Group and Google have announced Aurora, Illinois, as the location for the exchange’s new co-location facility. Anthony explains why this is more than just the next phase of the two companies’ originally announced project.
This Week: Genesis/Interop.io; S&P Global; Finos/OS-Climate and more
A summary of the latest financial technology news.
GenAI: US Fed reveals its five use cases
Internal sandbox used to assess viability and risks; coding and content generation on the agenda.
Natixis refines in-house interoperability model
The French asset manager has refined its canonical data model over the last decade, as the interoperability movement continues to evolve.
UK asset manager: AI in macro trading ‘very overblown’; useful for nowcasting
The managing partner of Fulcrum Asset Management said that the firm has been developing nowcasting tools that even central banks have consulted on.