When Drillinginfo acquired Datagenic in October of last year, its CEO and President, Jeff Hughes, said “we’re acquiring DataGenic because of their unique ability to extract actionable intelligence from the information noise and the downside of what ‘big data’ brings.” It had previously acquired MarketView in 2016 and it was plain that the combination of MarketView and Datagenic would make for some interesting synergies. So it was little surprise to read late last week an announcement from Drillinginfo regarding a real-time curve-building product that combines “the cutting-edge market data management platform of MarketView with the complex forward-curve capabilities of recently-acquired DataGenic.” MarketView’s CurveBuilder is a “product focused on addressing the underserved needs of energy traders, analysts, and risk management officers,” deigned to provide greater price visibility via an enhanced capability to create and easily share, real-time, synthetic forward curves.
Interestingly, the announcement focused in on LNG markets as an example, which has no established forward price curve. Here, the tool will allow the forward price curve to be built from price and cost inputs associated with buying natural gas, liquefying, transporting and re-gasifying, according to Juan Pedraja, VP Professional Services for trading & risk. The MarketView Curvebuilder includes a robust, rules-based engine to allow the generation of forward price curves, accompanied by audit trails and process logs to aid in compliance as well as allowing users to blend proprietary data with third-party data, according to the announcement.
In a past life, I recall a number of instances in which power trades in rather illiquid markets with no reliable, nearby price curves where required to be valued. A suitable approach was determined by the risk manager, approved by management and external third-party experts and then spreadsheets built to continually model the synthetic price curve. Although the approach worked and was acceptable, it required manual updates in a spreadsheet by a specific person and as such, was possibly open to error or indeed potential abuse. It is exactly this sort of scenario in which MarketView Curvebuilder will have application and more importantly, can help ensure reliability and auditablity. More details can be found within the announcement.