ETRM Oil and Gas Trading software stands for Energy Trading and Risk Management software focus on energy commodity trading and risk management. ETRM software is used by financial trading companies, banks and physical energy companies from upstream, midstream to downstream. Core software functionality includes trade capture, trade valuations, counter party credit worthiness and limit monitoring, risk factors reporting and monitoring, trade compliance, and financial derivative accounting (Mark-to-Market) and hedge accounting. Additional functionality used by oil and gas companies usually includes products scheduling on pipelines, rail cars, vessels, storage tanks together with trade volume actualization and accounting settlement.
Due to the recent advancement in technology, so many organizations are in search of new ways to help streamline tasks, reduce operation costs, manage risk, and optimize processes. One of such technologies that have been employed by oil and gas firms to help manage risk and increase productivity is the use of ETRM systems.
ETRM system like EnHelix software designed specifically for oil and gas industry to streamline trading operations, better risk management, and maximize margins with artificial intelligence. In addition, EnHelix blockchain enables traders to automate their trader orders, get better spreads, and reduce manual paperwork significantly.
EnHelix is an integrated oil and gas software for oil and gas trading, credit, scheduling, and accounting that eliminates data hand-off between different systems and save time on reconciliations, better security, and internal controls. Besides, EnHelix new artificial intelligence solutions provide voice assistants, AI forecasting and predictions, and lots of automation.
Commodity trading is volatile and unpredictable due to the changes in product prices. Energy trading also involves lots of risk due to the activities of some fraudulent traders. However, ETRM systems offer benefits that can help energy traders not to fall, victims of fraud, gain insight, and make informed decisions. Some of the benefits of ETRM software include the following:
ETRM systems provide front to back-office support for energy traders, oil and gas firms, and suppliers. It covers a full range of commodities and derivatives. It also includes a market interface for scheduling, monitoring, risk reporting, collateral management, treasury management, and eliminates the manual data integration required in trading operations. Some of the back ends support provided by the ETRM system includes: deal capturing and price management, logistics and scheduling, position management, risk reporting (VaR, EaR), valuation and optimization, accounting, settlement, and regulatory reporting.
Commodity prices are volatile. At the same time, they constitute a significant portion of production costs. However, a comprehensive ETRM system supports physical and financial trading. It can deal with a wide variety of commodities like power, natural gas, metal, crude oil, and oil derivatives. ETRM systems, therefore, provide a complex portfolio used by energy traders, companies, and energy suppliers with significant price exposure.
ETRM systems entail comprehensive risk management policies and strategies. The systems are installed to help organizations, oil and gas traders, and energy suppliers understand risks involved in the value chain and provide the best option to overcome such risk. At present, so many global firms that engage in energy trading make use of ETRM solutions to mitigate risks and maximize profit.
ETRM systems are cloud-based solutions with multiple functionalities. They function faster in various capacities. They can also be implemented in half a time that it will take the on-premise systems to function. In addition, ETRM provides insight for business owners to make informed decisions. The systems are quite easy to use, and energy traders can make informed decisions faster.
ETRM systems analyze data from different sources in real-time. They enable traders to make accurate trading decisions while providing in-depth insights that keep oil and gas firm stay competitive and eliminate errors in aggregating and collecting data.
ETRM system also improves the efficiency and productivity of oil and gas firms. Trading companies do not have to spend a large amount of operating costs on aggregating data and other repetitive tasks. This is because ETRM systems are designed to work without manual supervision. They save organizations a lot of time and allow employees to focus on important aspects of the business. In addition, ETRM systems are highly scalable and offer greater flexibility. Those that are specifically built for oil trading enables traders to manage physical trade, derivative trade, risk, mark top maker, logistics, and planning at a time.
ETRM systems are designed to manage risk effectively. With this system, energy traders can build market-specific products based on swap, options, and physical commodities. It provides an accurate and comprehensive view of pricing and market conditions. This information helps commodity trading companies to manage risk better and make informed decisions. It also offers real-time updates on important information like risk exposure, available credit, position, and profit and loss.
In ETRM system, one of the most important functionality is delivering energy products to customers designated destinations. This part of the ETRM system is called scheduling or delivery of products. In the commodity business, scheduling can be a very complex activities.
There are many scheduling considerations and the one scheduling all the products movements are the schedulers. Their responsibilities are to work with service providers and plan to path to move products efficiently. The goal is to delivery products at minimum cost and on time. Any delays or retention will incur in higher cost and eat into margins.
The way that schedulers move their products can consist of many product paths. Path can be receipt, deliveries, point to point, store or draw from inventories. Each path incur certain costs and scheduling software like EnHelix ETRM software can help. EnHelix automatically link all transport costs to the underlying contracts giving traders a clear understanding of the true trading margins.
ETRM systems place in the palm of oil and gas firms the right tools they need to stay abreast of the increasing demand in commodity trading. It supports forward trading and is designed to help make the front office more variable while keeping the back office balanced. It is also a cutting edge infrastructure that makes improve productivity.
EnHelix provides full trade management from new trade, amended trade, electronic confirmations, credit monitoring, contracts document generation and approval workflow, scheduling, economics modeling and analytics, price analytics, actualization and accounting settlement, sub-ledgers and optional financial accounting (Account Receivables, Account Payable, and General Ledger)
Besides the core solutions, EnHelix oil and gas artificial intelligence automatically machine learns about your business data and provide a comprehensive business Artificial Intelligence dashboard with vital AI statistics and PKI. Oil and gas trading companies can create their very own blockchain network easily using EnHelix blockchain technologies and conduct smart contracts with their other traders, business partners, JVs, vendors, banks, and regulators.
In today’s market situation where margins are squeezed, commodity traders are looking for tools that could help them to increase profitability. Artificial intelligence technologies offer new opportunities to improve process performance and realize significant cost savings. These technologies can be implemented in short sprints, focused on a specific problem, with manageable costs.
In the context of commodity trading, AI-powered technologies are not the ability to forecast potential price movement up or down or foresee a fundamental change in a specific commodity. Instead when applied to commodity trading, artificial intelligence attempt to read and decipher order flow coming into the exchanges for entry or exit of a long or short commodity contract position.
The system calculates all incoming data at a rate of milliseconds, deciphers it, and automatically produces buy and sell orders with great speed and in large volume. No part of the artificial intelligence’s decision-making process was formed from a fundamental occurrence of the commodity.
To be fair, whether decisions to buy or sell are generated by human thought process or computer programmed, the attempted result for speculation is the generation of profits. Speculation is needed in commodity production. Speculators assume the risk for those who wish to transfer risk. Rampant speculation has the potential to push the price of a commodity above or below what fundamentals may have warranted. This impacts the final price to the consumer.
Many algorithmic traders attempt to justify their existence in the markets by suggesting they provide liquidity. Although the volume of orders does produce liquidity, but only to a few that are either currently in the market or can act or react at the same speed in which they operate.
AI makes a real difference in commodity trading by mining important data and providing cheap and easily available tools that benefit everyone. The investment decisions made by AI will be calculated, accurate and unbiased unlike those made by humans, who are supposedly too emotional for the stock market.
Finally, in today’s low-price market, oil and gas firms that need to stand strong and remain competitive must adopt the use of AI technologies which has the potentials to differentiate between companies that thrive and those that will be left behind. One such technology that is revolutionalizing the oil and gas industry is EnHelix.
EnHelix is an AI ready energy trading and risk management software platform. It is designed to serve energy businesses of size and kinds. The system offers turn-key solutions for commercial contract management, marketing and trading, pipelines and plants management, land management, asset optimization, supply and logistics, accounting, risk management, operations, engineering, and other functions.
Even as a fully-functional product. EnHelix delivers artificial intelligence, big data analytics, the blockchain, data warehouse, compliance and collaboration processes for the enterprise.
EnHelix ETRM is deployed an on-premise hybrid cloud or entirely on the cloud. The software platform includes desktop application, web portals, and cloud all work together with built-in AI and blockchain functionality. In addition, it offers a Software Development Kit that gives enterprise IT developers the ability to add custom functionality. Also it can be used to extend AI and blockchain capabilities and interface external applications.
In the past, commodity traders relied on inefficient on-premise systems to manage risk and make informed decisions. However, managing energy trading in our present world is quite demanding and challenging due to the volatility of commodities. The best way to manage uncertainties and improve productivity in energy trading is through the use of a ETRM system. ETRM systems have a broad range of functionalities as listed above. It help business owners and commodity traders gain insight and make informed decisions.