Reports Disruptive Technologies in Commodity Trading | Page 16

Disruptive Technologies in Commodity Trading Markets
that integrates technology from Google-owned AI
company DeepMind to improve the power network’s
transmission efficiency by as much as 10%. Given the
increasing amount of unpredictable renewable gen-
eration, National Grid must maintain the frequency
of the grid within a relatively tight band of values, and
being able to process massive amounts of data and
utilize AI powered predictive models can proactively
address surges in demand or instances of oversup-
ply.
Automated trading is now catching on in commodi-
ties and according to the CFTC, represent over 60%
of crude oil trades and more than 50% of metals and
Ags trades on the CME 8 . Larger traders, who have
A ComTechAdvisory Report
seen margins erode, are now focused on gathering
data on an unprecedented scale and then running
ML algorithms on that data to find patterns linking
fundamentals to price. This increased attention and
investment in algo trading has resulted in a massive
increase in demand for data scientists and other da-
ta-related skills across the industry.
Another area of innovation in Europe where AI, au-
tomation, analytics and other technologies are being
deployed is in the creation of virtual power plants.
In one initiative, Next Kraftwerke, a virtual power
plant operator and energy trader, combined small
and medium-sized electricity producers with flexible
electricity consumers in a single European-wide Vir-
Figure 5: What do you believe, from a technology standpoint, has the largest potential to disrupt commodity trading & risk manage-
ment business processes?
40%
30%
20%
10%
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https://www.cftc.gov/sites/default/files/idc/groups/public/@economicanalysis/documents/file/oce_automatedtrading_update.pdf
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