Commodities research house of the year: Refinitiv

Energy Risk Awards 2021: Research house’s swift reaction times bring critical insights to clients as events unfold

Geoffrey Smith

Last year’s Covid-19 pandemic left commodities firms dealing with unprecedented disruption, extreme volatility and historic negative oil prices. Firms needed to understand their exposures and gain a tailored insight into how the Covid-19 pandemic was developing and impacting the economy.

Under difficult conditions and remote working, financial research and data provider Refinitiv worked quickly and decisively to create a range of applications and solutions designed to provide users with greater insight into the causes, short-term effects and long-term implications of last year’s events.

For example, the firm released an application to track Covid outbreaks close to infrastructure such as refineries, ports, pipeline systems and storage units. Using data feeds from providers such as Reuters, this was an interactive layer added to an existing map, that enabled users to mitigate the potential effects of an outbreak on or close to key assets.

Refinitiv often uses powerful visual elements to convey the company’s analysis of the impact of events as they are unfolding. “The challenge in the commodities world is always around the speed of change and how our teams are able to look through huge amounts of data, to standardise, clean and analyse, and then provide actionable insights on the back of this,” says Adam Kowalski, director, commodities content and research at Refinitiv.

Geoffrey Smith, Refinitiv’s director of oil & shipping research, adds: “We can do this because we have extensive market coverage across commodities. In oil, for example, we have teams in the main trading hubs of Houston, London, Dubai and Singapore, so we can pull information and analytics together very quickly.”

The firm was also quick in packaging up its data and research and delivering it in different ways. There was an estimated 20–25% uptick in webinar registrations in 2020, for example.

Adam Kowalski

Another major event for commodities firms was the six-day blockage of the Suez Canal by the 200,000-tonne cargo ship Ever Given in March 2021. Refinitv’s research teams reacted by developing a dedicated application to analyse trade flows. This was integrated with its vessel-tracking solution to give a real-time view of congestion building in ports and to provide detail on the impact on chartering costs and availability.

Much of Refinitiv’s ability to act quickly in these situations is due to the fact it is already tracking a lot of the key data for commodities markets. Its experts run at least 200 models per day across more than one billion data points.

“It’s very similar to playing with Lego, where the blocks represent data,” says Alessandro Sanos, global director sales strategy and execution, commodities at Refinitiv. “We have a lot of building blocks, so it’s a matter of creativity and interaction between the different teams to come up with something in record time,” he says, adding that the Suez Canal application was developed the same day the news broke about the ship getting stuck.

In-house expertise is also crucial to its offering. Refinitiv employs a wide range of commodity market experts – from economists and mathematicians, to meteorologists and shipping captains. And as the research industry has continued to move further into the realm of data science over the years, Refinitv has also developed its in-house technology expertise.

“We have had a team of dedicated modellers for many years that work with proprietary data sets in areas such as cargo tracking,” says Smith, adding that Refinitiv also uses artificial intelligence (AI), including machine learning. “But not only do we have this core AI expertise to produce models and forecasts, our analysts are also becoming more experienced with python scripts and data visualisation tools. This helps us react quickly to market events and also answer more complicated questions on the fly, while putting that information into formats our clients can digest.”

In the end, however, it all comes back to the people. Refinitiv’s commodities research team consists of more than 150 industry experts that cover markets including oil, gas, power, carbon, liquefied natural gas and weather. “We have vast data lakes that we can use and technology that can support the analysis and visualisations, but what we really offer is the expertise, the people and talent that we have within the organisation,” says Kowalski.