Managing increasing complexity in the energy and commodities markets

The energy and commodity markets are experiencing a mix of volatility and oversupply. A quick scan of headlines reveals that firms participating in these markets are bracing for a variety of fast-changing situations. They have to adjust to sagging prices for precious metals or quickly develop strategies to capitalize on massive oversupply of crude oil. These highly volatile conditions have multiple ramifications for firms trying to survive

and excel in energy and commodity markets. There is a domino effect upon the hedging, margining, credit and liquidity operations — just to name the top ones — that support energy and commodity transactions. But trying to foresee and then fit the pieces together to formulate more effective strategies is almost a black art based on hunches, experience and most likely incomplete data.

What if a firm working in these increasingly difficult markets could aggregate a holistic view of key data, including structured, unstructured and unrelated data that is in multiple formats? Transforming data to create this kind of view would require overcoming a complicated technology landscape.

For instance, Royal Dutch Shell’s announced $70 billion acquisition of BG Group will yield an enterprise replete with multiple transaction platforms, redundant data feeds, and autonomous systems that have unique data requirements.

For firms large to small, the scenario and challenges are likely to be similar: firms need to gather and process the relevant data in a centralized location. Once the data is aggregated, there needs to be a transformation of the data into a common format that will allow for the essential analysis that will help the firm develop effective strategies to fend off the competition and advance its mission.

The need for a holistic view of data made more valuable via business intelligence technologies is in line with the explosion in data that firms must manage - even though they may have aging IT infrastructures or are burdened by manual processes and systems that cause costly errors and impede operational efficiency. If those challenges weren’t enough, the complexity of ongoing regulatory reform and their subsequent reporting requirements are putting data management strategies at the forefront of concerns for energy and commodities trading firms. The situation is ripe for a solution that can provide an enterprise with macro-level views and micro-level detail. It must also be able to work with a variety of transaction systems, serve as a golden source of data, support a cross-platform work flow and deliver access to all the data that runs the enterprise.

Find the full white paper, including the full benefits of data integration by OpenLink here. OpenLink will be at Flame Conference in May 2016 - find out more about sponsorship opportunities here.