How Apple’s ‘holy grail of data’ took traders up the wrong track

Energy traders’ excitement at the Apple tracker quickly faded. (Reuters)
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Updated 03 July 2020

How Apple’s ‘holy grail of data’ took traders up the wrong track

  • Real-time information on fuel demand is the ultimate prize for hard-pressed analysts — but it’s proving hard to find

NEW YORK: Every day, energy merchants collect and scrutinize whatever information they can find on fuel demand to get a trading edge: From satellite data tracking oil tankers worldwide to thermal images from cameras on pipelines and storage tanks.

Real-time data on fuel demand would be the ultimate prize.

On-the-spot gasoline consumption figures would change the way oil markets trade, because it is “the holy grail of metrics,” said Patrick DeHaan, head of petroleum analysis at GasBuddy.

A few weeks ago, the market thought it had found it. In mid-April, Apple Inc. unveiled new data tracking human mobility trends, capturing user activity in searching for directions on smartphones.

The timing was perfect. Traders were chasing any clue to fathom the speed of recovery from the fastest and deepest collapse in fuel demand in history during coronavirus lockdowns. They relished the chance to incorporate mobility data into trading models.

But US Memorial Day came, and the search data did not translate into activity. The US Energy Information Administration (EIA) proxy for gasoline demand fell nearly 6 percent for the week including the holiday. Gasoline futures, which had rallied into Memorial Day, fell after the holiday that kicks off the summer driving season.

That disappointed traders, given roughly 70 percent of oil consumption worldwide is via vehicles, and as current data for retail demand generally looks either at the previous week or earlier periods. Several traders told Reuters on background that the discrepancy caused them to discount Apple’s index. The sticking point, they said, was that Apple’s mobility data is based on search information rather than miles traveled. Matt Sallee, managing director of investment firm Tortoise Capital Advisers, said that data has not correlated as strongly to demand as other indexes.

Apple declined to comment. Settings for the iPhone include an option to limit notifications when the device perceives someone is driving, but it is unclear if Apple intends to use that data to enhance its mobility index.

Sallee said that he was still using Apple’s figures, but combining them with other datapoints to make decisions as an energy-focused stock fund manager.

“The pandemic made everyone a lot smarter about sourcing and using real-time demand data, a trend I think is here to stay even after it subsides,” Sallee said.

He also uses data from TomTom, the global location technology company, which monitors real-time traffic congestion in major world cities, along with the Dallas Federal Reserve Bank’s mobility and engagement index. That index tracks various mobility metrics, including how far user devices travel in a day and how long they stay away from home. The figures are reported on a lagging basis.

On the retail side, the mainstays have long been GasBuddy, which monitors fuel prices and transaction volume at gas stations across the United States and Canada, and Oil Price Information Service (OPIS), which provides pricing and news information for a variety of refined products.

Apple’s data purports to capture everyone that owns an iPhone, about 100 million people in the US alone.

RBC analyst Michael Tran said that currently he finds TomTom more reliable than Apple searches, in part because most people do not use apps to map out their commute. RBC combines TomTom data with other geolocation data compiled in-house for research purposes.

John Kilduff, partner at hedge fund Again Capital in New York, said he can foresee a time when retail gasoline trackers are as abundant as companies tracking pipeline flows. Still, those reports can send contradictory signals or end up at odds with official EIA figures.

“For now, I will stick to the EIA report,” Kilduff said. 


Creditors take action against Al Jaber in decade-long saga

Updated 23 September 2020

Creditors take action against Al Jaber in decade-long saga

  • The downturn in the Gulf construction sector has triggered a number of corporate restructurings as companies are forced to reschedule debt, raise fresh borrowing or enter insolvency protection

DUBAI: Creditors have started to enforce claims against Abu Dhabi-based Al Jaber Group, in a dispute triggered by a construction downturn in the UAE more than a decade ago.

Al Jaber, a contractor with interests across a range of sectors, has struggled since building up debt in the wake of a UAE real estate crisis and began talks with creditors in 2011.

Abu Dhabi Commercial Bank, which is working as restructuring and security agent, said in a document dated Sept. 21 which was seen by Reuters, that it had instructions from the majority of creditors to proceed with claims against Al Jaber.

A representative for Al Jaber did not immediately respond to a request or comment. ADCB declined to comment.

The move follows delays in restructuring agreements, under which Al Jaber was to appoint a new board and sell companies and assets such as the Shangri-La hotels in Dubai and Abu Dhabi.

In exchange, creditors had agreed to extend the maturity of a 5.9 billion dirhams ($1.61 billion) loan, cut interest rates, and provide additional revolving debt.

The initial enforcement action now being pursued by creditors includes the “acceleration and demand for payment of amounts outstanding” under the previously agreed debt restructuring, a source familiar with the matter said.

Enforcement will also allow creditors to claim against Al Jaber’s chairman under a 4.5 billion dirham loan to the company.

Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after an oil price crash hit energy services and construction.

The coronavirus crisis has added to the strain and Arabtec Holding, the UAE’s biggest listed contractor, this week will discuss options including dissolution after the pandemic hit projects and led to additional costs.

Meanwhile, Dubai-listed construction firm Drake & Scull is working to reach an agreement with its creditors in an out-of-court process.