Market Analytics
The analysis that we undertake is based on two key methods: fundamental analysis and technical analysis.
Fundamental analysis
In fundamental analysis, we study the news flow coming from the energy markets with regard to the availability of oil, gas and coal. If an electricity plant goes offline for maintenance, for example, it affects the energy markets. What's going on in the economy as a whole also has an effect on the price of energy.
News helps our energy analysts form a view as to whether or not the markets are stable. We can assess whether a market is bullish and likely to rise or bearish and likely to fall. We are always up to date on world and national news, and we receive a constant stream of reports from essential news sources.
Most clients believe and expect that it is news and information that affect energy prices. They do to a point, but there's more to the story.
Technical analysis
Technical analysis is the process of assessing patterns in a market, regardless of news flow. For example, consider the price of oil at this moment. Everyone is aware of the news that exists at this time, and this has an affect on the price of oil. However, the price of the oil will still change in an hour, with no additional news. The changes in price result from perceptions of rising and falling markets; it arises from speculation.
As energy analysts, we look at patterns in the price graphs of energy. These patterns indicate where the markets may go, where they are trending regardless of news. No one knows what the news will be in 2010, and yet we have to make buying decisions regarding the future. Therefore, technical analysis is as important as fundamental analysis when purchasing future energy.
It is the combination of these two methods of analysis which makes what we do so effective. We are able to form a view as to market stability and trends and consult our clients accordingly.
