Russell Hardy, CEO of Vitol, said that trading companies mainly use AI in two ways: one is to improve business efficiency, and the other is to gain trading advantages through stronger analytical capabilities.
In the field of commodity trading, the world's top traders are turning to high technology and applying big data and AI to enhance competitiveness.
This technology competition is becoming increasingly intense around the world, and companies such as Vitol and Trafigura have increased their investment to advance at the cutting edge of the market with technological innovation. The media quoted Vitol CEO Russell Hardy as saying, “In a sense, this is an arms race. Trading companies mainly use AI in two ways: one is to improve business efficiency, and the other is to gain trading advantages through stronger analytical capabilities.”
This shift is partly due to competitive pressure from financial institutions such as hedge funds. Compared to the physical transactions of traditional traders, these institutions gain an advantage in commodity related financial product transactions through data-driven strategies. Take the Miami-headquartered hedge fund Citadel as an example. By building a strong data analysis team and introducing unconventional methods such as weather forecasting experts, it is ahead of market information acquisition and analysis.
This wave of technology has swept through the entire industry. From crude oil to the electricity market, data and AI can be seen everywhere. The energy transition and the special nature of the electricity market have led to a sharp increase in complexity and data volume, putting higher demands on data processing and analysis capabilities. Swiss Mercuria and other commodity traders are stepping up the information gap between rivals in the same industry by deploying their own AI systems.
This technology-based competition has not only changed the way traders seek advantages, but also indicates that in the future, more efficient and intelligent trading models will become mainstream.
However, despite the increasing breadth of technology applications, traditional traders emphasize that physical trading is still indispensable. As the founders of Mercuria said, deep participation in physical operations is their constant core business, which is both a commitment to traditional transactions and a response to the constant demands of the energy world.
Editor/Somer