An oil trader's best friend

In the high-stakes world of oil traders one might think it’s sophisticated analytical software, live news feeds and spreadsheets that are key to success. Try something a bit more basic, like a phone line and Yahoo Instant Messenger, says the BBC:

“Trading oil is about getting information and knowing where the market is,” says Eivind Lie who runs the trading desk at the Norwegian oil company StatoilHydro’s offices in London.
“So being a trader your life is pretty much either on Yahoo or on the telephone trying to get an overview of the market.”
While people trading shares or currencies can get a lot of their information from analysts’ notes and computerised trading systems, the oil trader still relies on chatting to a wide range of people, ranging from other traders to specialist oil trading journalists, to try to find out what is going on in the world.
Everything from war or natural disasters to more mundane events such as seasonal changes to temperatures or elections can affect oil prices, so for the traders it pays to be informed.

An energy risk management expert told me recently he regularly talks to students who think they’d be great energy traders because “they can just get a good sense of which way prices are going” from watching the markets. It’s a ridiculous notion, he says, because the only way to really know is to study all the parts that drive suppy and demand of a commodity, to know the producers, the pipelines, the storage facilities and the end customers. That deep knowledge of the physical side of the business helped make Enron such a formidable trading force years ago and it’s likely the reason one of the most successful energy trading shops, Houston-based Centaurus Energy, made a big move into natural gas storage several years ago.
“When they find out what’s really involved in energy trading they tend to lose interest,” he said.