Platform

TST Oil Platform Overview

The Platform enables colleagues and constituents to more comprehensively, transparently and dynamically forecast oil prices by synthesizing qualitative and quantitative analysis in one efficient process and toolset, thus increasing the odds the forecasts will be correct.  We invite any professionals interested in exchanging ideas with us and/or debating our assumptions and forecasts to join us in a dialogue about oil prices as we update our forecasts each week.  The benefit to everyone involved will be the ability to integrate their judgments as to the best ideas into their individual forecasting processes and results.

The Models

The Platform includes (1) 3 models: Fixed Drivers (algorithmic/quantitative), Dynamic (qualitative/judgments) and Price Forecast (synthesis of the two models), (2) multiple scenarios and (3) a host of other resources (real time data from Bloomberg, drivers databases, research center, historical models, charts and indices), all as more fully described at  TST Energy Systems  and  TST Oil Prices Systems.

We use the Fixed Drivers Model to generate an algorithmic forecast and the qualitative metrics for a Dynamic Drivers forecast.  We then synthesize them in our Price Forecast Model and weight them based upon our judgments with respect to the conditions applicable at the time of decision.

Dynamic Drivers Filtering System

The platform includes our Dynamic Drivers Filtering System.  TST Live Oil is always focused on identifying the drivers of oil prices – i.e., the small set of factors that drive oil prices at any point in time.  To quote Investopedia, the drivers are usually qualitative.  TST’s unique ability to quantify and visualize the QL factors in the language of the oil markets enables users to prioritize the drivers rather than overweighting the quantiftative factors simply because they are easier to model.  However, identifying the drivers and their ripple effects and synthesizing them into a coherent whole is extremely difficult to do.

TST Live Oil’s solution is to use its powerful Dynamic Drivers Filtering System to do so.  The basic components of the system, from a bottom-up perspective, are the Drivers Research Center, Drivers Database and Drivers Models.  The drivers for the 3 components are organized based upon the Dynamic Drivers Taxonomy.  DriversPyramid

 Best Thought Process Methodology & Toolset

TST Live Oil is a methodology plus a toolset to implement it.  The methodology is to prioritize at all time the best thought processes and language to communicate them and then to quantify and visualize them in the easiest to understand way using an array of communications tools.  These tools include models, research reports, databases, photos & videos.TST System Components

Oil Prices Organizational Taxonomy

The Oil Prices Taxonomy governs the workflow for the entire system.  The advantage of the TST workflow is all workflows are seamless due to TST’s ability to quantify all of the drivers — QL & QT — using our Common Measurement System.

Tier 1 of the Taxonomy

TSTOilTaxonomy

You can see Tier 2 of the taxononomy at

Our Algorithmic System is Proprietary

The Fixed Drivers (QT) forecast is one of two main systems in our Oil Price System.  The Fixed Drivers Summary below gives you a sense of how it works; however, we only show the model in live demos because it is proprietary.  However, our experience is that virtually all potential users of TST Oil have their own quantitative models (QT) and, it is the Dynamic Drivers (QL) Models that enable them to do what they can’t do with their existing toolset.

FDModelSummary

Dynamic Drivers Model Overview

Our Dynamic Drivers Model focuses on the qualitative drivers. It is judgment-driven, highly dynamic and synthesizes our thought process in the form of a story.  We can change the drivers, weights, impacts and probability judgments in virtual real time and see the change in price for each driver and the overall price instantly.  Sample QL drivers include concepts (Animal Spirits / behavioral finance), trends (globalization / rising middle class), interest groups (Sunni / Shia /Germans / Greeks / Exxon Mobil / Gazprom), new technology (hydraulic fracking) , government regulations Dodd-Frank), photos (Picasso’s Guernica for Spanish Civil War), and government leaders (Xi Jinping, Putin & The Donald).

OilPriceComplexity