Energy markets are notoriously hard to read. Their gyrations reflect not only the immutable laws of supply and demand but also the caprices of geopolitics, extreme weather and shifting investor sentiment. Traders, investors and risk managers have long sought better tools to decipher such complexity. A British company thinks it has an answer.
Permutable, a London-based provider of market-sentiment analytics, has unveiled what it describes as the most comprehensive suite of energy-market indices yet. The package comprises 462 indices that attempt to distil, in real time, the fundamental, macroeconomic and psychological drivers of global oil and gas markets. Clients can pore over historical data sets, monitor intraday feeds and run analyses guided by artificial intelligence.
Wilson Chan, the firm’s founder and boss, argues that commodities are “one of the most attractive yet complex asset classes”. The aim, he says, is to “level the playing field” for a broad spectrum of institutional actors: hedge funds and asset managers, certainly, but also trading houses, utilities and corporate risk managers.
The indices cover the waterfront of energy data. They track crude-oil and natural-gas inventories, export and trade flows, production data and analyst forecasts. They also incorporate less tangible but equally influential factors: commentary from industry insiders, shifts in media sentiment, and sudden events such as pipeline outages, sanctions or natural disasters.
The system assigns a score to news not by the volume of coverage but by its measurable impact on prices — a refinement designed to separate signal from noise.
Permutable’s coverage is global
Permutable’s coverage is global, spanning Europe, North America and Asia. That, the firm claims, allows clients to identify arbitrage opportunities across regions, or to anticipate knock-on effects in one market from developments in another. By feeding data through its “leading indicator” framework, the platform seeks not merely to explain market moves after the fact but to predict them.
The appeal is obvious. The past few years have brought wild swings in oil and gas prices, spurred by Russia’s war in Ukraine, sanctions, OPEC+ supply cuts, American shale output and renewed competition over liquefied natural gas.
Energy’s renewed centrality in both economic policy and geopolitics has heightened demand for sharper intelligence. For institutions whose fortunes depend on energy costs — or whose strategies rely on speculating about them — any edge in timing and risk management is welcome.
Permutable insists that its indices integrate easily with clients’ existing systems. Systematic investors can access the data via API for automated strategies, while discretionary traders and corporate strategists can make use of more digestible dashboards. In principle, the offering could be as useful to a utility hedging its exposure to winter gas prices as to a macro hedge fund scanning for geopolitical signals.
Market fundamentals and sentiment combined
The company is pitching its launch as the most complete attempt yet to marry hard fundamentals with the softer science of sentiment. Others have tried to measure mood, often with crude tallies of news stories or social-media chatter. Permutable’s refinement is to link those measures explicitly to market outcomes, training algorithms to distinguish the events that move prices from those that merely fill column inches.
Sceptics may question whether yet another suite of indices can truly anticipate markets that have confounded even the most seasoned traders. Yet as volatility persists and energy assets loom larger in institutional portfolios, demand for sophisticated tools is unlikely to abate.
Permutable’s indices are now available to clients, who can request demonstrations or trial access. For them, the promise is clear: in markets where the fundamentals are murky and sentiment can shift in an instant, every flicker of insight counts.
