Top Traders Unplugged GM35: The Drivers of the Commodity Markets ft. Nicky Ferguson
Career Path
- Nicky Ferguson started at Koch Industries, working on a systematic energy trading desk.
- Later, he moved to a discretionary trading team, incorporating quantitative tools into decision-making.
Fundamental vs. Financial
- Fundamental inputs' value varies across assets and time.
- Natural gas markets are more fundamentally driven, while oil acts as a risk asset.
Market Players
- Major energy market players include commercial entities (producers, refineries) and non-commercial participants (systematic/discretionary traders).
- Commercial entities often engage in proprietary trading leveraging their physical activity.
Today we are joined by Nicky Ferguson, Founder of It's Not a Science, an energy markets research firm based in Basel, Switzerland. We talk about speculative positioning in oil and natural gas futures, and how to distinguish between price action driven by fundamentals and flows. We discuss real time indicators of oil supply and demand, and the time it takes various investors to absorb new information. Finally, we discuss the limitations of the DXY dollar index as a baseline for measuring commodity price returns, increased options flows given new players in the market, and ways to understand what's going on based on modes of oil transport. Join us for a deep dive with an oil trader turned business owner, for an expert view of the mechanics of the energy market.
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
-----
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Cem on Twitter.
Follow Nicky on LinkedIn
Episode TimeStamps:
02:46 - Introduction to Ferguson and It's Not a Science
09:42 - The major players in the energy markets
12:56 - Speculative vs. commercial
18:43 - Forecasting the flow
25:02 - What has caused spikes in nat gas?
27:15 - Financial flows in commodity markets
30:22 - Risk considerations
32:14 - The relationship between fundamentals and price action
34:28 - Measuring demand
36:09 - The findings from Ferguson's research
39:46 - Oil on water supply vs land supply
41:33 - The impact of the dollar changes
45:33 - Measuring expectations
48:00 - The state and future of Ferguson's business
53:49 - Key takeaways from Niels
Copyright © 2024 – CMC AG – All Rights Reserved
----
PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here