Mastering Data in Commodities: In conversation with Arthur Richier

Today’s commodities markets are more unpredictable than ever. Geopolitical tensions, rising inflation, and the energy transition are all contributing to the volatility. To manage risks and find new opportunities in this competitive environment, industry players are turning to advanced data and analytics to provide clarity in uncertain times. In this series, we’re talking to leaders in the commodities sector to get their take on how to excel in this new data-driven landscape.

We recently had the pleasure of speaking with Arthur Richier, Head of Strategic Partnerships at Vortexa. Vortexa tracks more than $3 trillion waterborne energy trades per year in real-time, providing energy and shipping companies with the most complete picture of global energy flows.

How has the availability of real-time data changed the commodities trading landscape? 

Enhanced market insights and data provide traders with real-time information on market conditions, supply and demand dynamics, weather patterns, and prices. This allows them to make decisions based on the latest market information and to react quickly to changes.

Back in the day, you had to wait for cargoes to be offloaded and for national statistics to be released. For example, you might find out only weeks later that France imported 20% less diesel last month and then try to interpret what that means for the month ahead. Now, we’re tracking 12,000 tankers in real time. This means that not only can you monitor, say, 20 tankers heading to France, but if they suddenly divert to Spain due to a shortage and higher prices, you’ll know immediately. You don’t have to wait six weeks for the cargo to be discharged and the data to be published. 

That being said, inefficiencies still exist. In one of the world’s largest economies today, and this remains a frustration from a data partnership point of view, all the import bills of lading are digitised. But they never did the same work for the exports. So, you have a market where we need to collect physical paper bills of lading for all exports and digitise them to make them available for our clients in what is a long and tedious process, whereas import data is available through an API and accessible in real time. 

What about longer-term trading, rather than high-frequency trading?

Well, another key advantage of real-time data is the integration of data analytics and AI, which enhances predictive modelling and trend analysis. This allows traders to anticipate market trends even more accurately.

One of the trends that many of our users monitor is seasonality. Having access to accurate data over a decade or more reveals seasonality and consistency. Whether you’re a trader monitoring real-time prices or an operator with long-term contracts needing to grasp the bigger picture, this data is invaluable. It offers a comprehensive view capturing the intricate details of individual cargoes and vessels. That makes up a very accurate picture, especially when it comes to the longer-term trends.

What’s been the biggest driver behind the democratisation of data in commodities?  

A major tipping point has been the reduced cost of launching spacecraft, which has led to a surge in commercial companies entering the market. This, in turn, has made satellite data more affordable.

In the past, large trading houses would spend millions of dollars renting satellites from governments to access crucial data. Today, the landscape has completely changed with private organisations launching their own satellites. When I attended the space conference in Colorado last April, I was blown away by the fact that there are nearly 10,000 satellites in orbit now, with expectations of reaching 100,000 by 2050.

This shift means that instead of spending $10 million a year to rent a satellite for accurate weather data or to monitor supply and demand across regions, the cost has plummeted. As a result, more people have access to this data, leading to the development of more models and trading processes. 

What do you think the next evolution in the data space will be over the next five to ten years?

Some changes are already visible. On the trading floor, the role of technology is evolving. Data scientists are no longer relegated to the background; they’re now working hand in hand with traders. For example, traders might ask data scientists how to integrate regional weather impacts into their pricing models. This collaboration is a significant shift, and while it’s still developing and will take time to become widespread, it’s a key change.

Looking ahead, the next evolution in the data space over the next five to ten years is likely to be driven by advances in computing power. Technologies like large language models (LLMs) rely on the fact that you’ve got this incredible computing power at your fingertips, and we’re only beginning to explore the potential applications in commodity markets. Not to get too technical but we have recently released a novel machine learning model for vessel destination prediction, leveraging the power of transformers to capture contextual relationships in maritime time series data.

When it comes to harnessing said computing power, I recently spoke with one of our partners, a large commodity broker who’s started using Microsoft Azure’s internal chat functions and voice recognition software to extract data from one of their brokers – for reference they receive around 800,000 calls a day across all their brokers. These calls contain valuable pricing and market information, and they’re now being leveraged more effectively.

As computing power continues to advance, we’ll see a similar shift to what happened with satellites. It will become more accessible and affordable, leading to increased use of advanced technologies within trading organisations and across various commodities.

How do you help your clients use your data effectively?

At Vortexa, we do so in three main ways:

In-depth analysis and reporting: We offer real-time views of crucial market data, such as the current supply of crude oil. By tracking all vessels – whether in transit, used for floating storage, or onshore – we provide a clear picture of the market today, not just in the past or future. Our detailed reports keep our clients informed about changes in crude supply, whether daily, weekly, or monthly. 

User-friendly interface: We’ve designed our platform with a super-friendly UI that makes complex data sets easier to navigate. Our clients often have tight schedules, so our aim is to simplify access to data, allowing them to quickly find and use the information they need without lengthy training.

Comprehensive support: 

• Product Specialists: Experts with backgrounds in trading and analysis who can help clients get the most out of our data and tools.
• 24/7 Support Line: Our dedicated team is available around the clock to handle queries and provide assistance.
• Solutions Architects: These are teams of former traders and data scientists with strong domain knowledge who work directly with our clients to develop customised solutions based on their specific needs. 

What do you love most about your industry and work?

It’s an exciting industry to work in – big, fast-paced, and full of massive real-world datasets. We deal with both structured and unstructured data, which requires AI and data analysis to interpret. Vortexa is growing rapidly, and our company has always insisted that everyone deserves a stake. We’re all shareholders, so everyone feels invested in the company’s success. We also push the boundaries with our technology, using the latest large language models and cloud-native technologies. There’s a strong focus on learning and development, and we want people to be curious and quick on their feet, training them to be the best in the market. 

Looking for more insights?

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