Why will Ai impact commodities?
The commodity markets are volatile as the price is impacted by the perception of future supply and demand for which there is a large and growing amount of data delivered at smaller and smaller intervals. Ai is different from other analysis/risk/trading tools as it seeks to mimic intelligence that can extend human capabilities. Machine learning algorithms can be trained and applied to data to give real time, continuously learning, decision support for commodity players with assets, proprietary data or those exposed to price movements.
Why has this not already happened?
Commodity markets still require a lot of domain knowledge or human understanding of how markets work and what data represents in order to be useful. In short, to utilise Ai tools one needs Data, Domain knowledge and Ai insight in equal amounts. However, as the data is mapped and the domain knowledge structured the Ai tools will become widely used.
When will this happen?
We see that some companies are already actively using Ai tools. However, this is limited to a few and not widespread enough to be visible in the market. We believe this will change rapidly and that within a year one will see behaviour in the market reflecting use of Ai tools.