skip to Main Content
Get your free newsletter: Actionable insight each morning for self-directed investors. 
Home » News » Commodities » Why is flow data important to oil traders?

Crude oil exports to Asia from the US, Brazilian and North Sea oil fields have jumped 55% in the first four months of 2017, according to the latest numbers out from Vortexa, the oil markets analytics platform. The numbers are pointing to the continued effect the agreement between OPEC and 11 non-member OPEC countries is having on supply movements.

The numbers are important, as they can influence the price of crude oil futures on major exchanges.

As recent OPEC cuts take effect, non-OPEC countries are filling the growing gap in Asian oil demand. The United States, Brazil and the North Sea have provided the vast majority of new barrels to Asia among non-OPEC countries, particularly when comparing oil flows between the first quarters of 2016 and 2017.

“Oil exports to Asia, in particular China and South Korea, from the US and Brazil were already growing, but flows at these volumes are unprecedented and we believe that this is the beginning of the end of an enduring trend,” says Fabio Kuhn, CEO at Vortexa.

US crude exports to Asia have increased almost sevenfold when compared to the same period last year, with the US now averaging 222,000 barrels per day. Brazilian exports have seen a more than 50% increase for the same time period, now supplying an average of 588,000 barrels per day to the region.

Asia’s demand for oil has also take a significant amount of North Sea oil away from its traditional European market, with an average of 398,000 barrels per day going to Asia in the first four months of 2017, according to Vortexa.

Vortexa is an analytics platform that absorbs billions of data points from hundreds of sources using AI, deep learning algorithms and Bayesian reasoning to reveal the past, present and future movements of global oil. It is the first analytics platform of its kind to provide traders with a live view of global oil and historical flow analysis, which can be essential to taking a view on oil prices.

AI can help traders predict expected oil movements over the new few months, including destination and cargo volumes intelligence. Figures are built on a cargo-by-cargo basis, and also incorporate an early view of import/export figures for OPEC, trading regions or individual countries.

Why is oil flow data important?

Active traders of oil will be looking for relatively small changes in the price of oil, particular in the near term futures market. If you are trading the new two or three oil contracts on a futures exchange, or using a CFD that is based on the next one or two contracts, you may not be aware of why some sudden moves in the oil price occur.

Sure, big events in the Middle East, or OPEC meetings, will have a major impact. But tanker shipments and the progress of oil from platform to pump can have a day to day effect on oil prices. When you are trading oil, you are not trading the stock of one company. There is much more information out there, all of it being used to drive oil prices one way of the other.

By keeping tabs on the big shipments and the demand from global markets, oil traders can provide themselves with an additional layer of analysis and potentially be aware of upcoming gluts and shortages which could push the price +/- a couple of dollars. Using margin trading, such price movements can be significant.

You can discuss oil trading with other traders and investors on our forums. Join them today.

This article is not investment advice. Investors should do their own research or consult a professional advisor.

Stuart Fieldhouse Editor

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

Stocks in Focus

Here are some of the smaller companies we follow most closely. They represent significant growth stories in our view. Our in-depth reports detail why we like them.


Subscribe for more stories like this, 8am weekdays - for free!

Get your free daily newsletter: 

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

FP Markets
Back To Top