The COVID-19 pandemic sent the world into a tailspin, impacting everything from the hospitality sector to the supply chain, the oil markets, and more. That made the observations of industry experts like Kurush Mistry invaluable at a time when confusion abounded. Thankfully, Mistry’s keen insight was helpful as we clawed our way out of the chaos — and continues to be relevant today.
“I think the real impetus came from when we were in the immediate aftermath of the outbreak of COVID, and at that point, many of the traditional ways of looking at things had to be put aside for a bit because the situation was just so new and we had to rely on things which we hadn’t in the past,” Mistry says.
“COVID really gave a large impetus for people to start looking at alternative data. There was a lot of information that was out there, but it just became more, much more valuable during that time. And then people, having seen the value in some of that, continue to use that information not necessarily to forecast such large changes because hopefully we won’t have such large changes in the future, but even to fine-tune their models to get a better level of accuracy.”
Kurush Mistry’s Backstory
Mistry brings to the table a varied and vast scope of experience. His academic foundation is rooted in finance and accounting. He pursued a commerce degree in Chennai, India, where he distinguished himself by ranking among the nation’s top performers in all three qualifying exams to become a chartered accountant. His thirst for knowledge led him to the prestigious Indian Institute of Management Ahmedabad, where he obtained an MBA with a focus on finance.
In a surprising twist, he ventured into film production in 2009, an experience that honed his adaptability and problem-solving skills in high-pressure situations. “If I ever started a business of my own, there would be more lessons there than working in a structured job environment,” Mistry reflects on this period.
Kurush Mistry’s entry into oil analytics came in 2009 when he joined a leading oil trading firm’s efforts to expand its analytics capabilities for gasoline and diesel teams in the United States. Over the years, he’s witnessed and adapted to significant shifts in the industry, from the rise of U.S. shale oil to the growing importance of renewable fuels.
Most recently, he’s been at the forefront of adapting to the seismic changes brought about by the COVID-19 pandemic. This global event not only disrupted oil markets; it also transformed the very nature of market analysis, pushing analysts like Mistry to embrace new data sources and methodologies.
The Rise of Alternative Data in Oil Analysis
The pandemic forced analysts like Mistry to rethink their approach to market intelligence. “There’s been a lot more alternative data, partly because of the availability of new technology — satellites, big data, and the ability of companies or providers to process it,” Mistry explains. This shift wasn’t just about new tools; it was a necessity born from unprecedented market conditions.
“Looking at, for example, the mobility data that Google used to publish, unfortunately they don’t anymore. Or looking at monitoring more closely inventory levels that were generated by satellite imagery.” These new data sources became crucial when traditional methods faltered in the face of global lockdowns and economic uncertainty.
The pandemic didn’t just change how analysts worked; it fundamentally altered global oil consumption patterns. Mistry notes, “Fuel consumption patterns changed, with the rise of work-from-home policies, and recent trends pushing back against that dynamic, or the prolonged impact of COVID on some large economies. “
This radical shift required a complete overhaul of traditional forecasting models. Kurush Mistry and his colleagues had to quickly adapt their analysis techniques to make sense of a market in turmoil.
The Analyst-Trader Relationship
In times of extreme volatility, the relationship between analysts and traders becomes more critical than ever. Kurush Mistry emphasizes the importance of this dynamic: “The ideal trader-analyst relationship is where you’re working as a team. There is a constant iterative process whereby analysis is presented to the traders. There’s feedback, they speak to someone, and they say, ‘No, actually, this assumption of yours may not be valid because I’ve spoken to someone at a refiner and they think what you’re saying is wrong.’”
This collaborative approach, according to Mistry, leads to better outcomes. “It’s really a team effort in firstly coming up with the best balance and scenarios that one can. And secondly, identifying profitable trading opportunities or good risk-reward opportunities together.”
As the oil industry grapples with a changing energy sector, Mistry has expanded his expertise. “In 2022, understanding the growing significance of renewable fuels in the energy equation, I broadened my expertise to include sustainable aviation fuel, renewable diesel, ethanol, biodiesel, and U.S. soybean oil,” he states.
This expansion is about more than diversification; it’s also about understanding the intricate connections between traditional and emerging energy markets. Mistry explains, “If you’re looking at the production of renewable fuels such as biodiesel and renewable diesel in the U.S., one of the major feedstocks used is soybean oil. Seeing just how that renewable demand for soybean oil interacts with the global soybean oil market, which has obviously a ton of food and other uses, that in itself is very interesting.”
Kurush Mistry: ‘You Have To Dig Deeper’
While the future of oil markets remains uncertain, Mistry believes that the changes brought about by the pandemic will have lasting effects on how analysis is conducted. “Now, a lot of the data is more broadly available to any market participant that’s willing to pay for it,” he notes. “You have to dig deeper and try and find more creative or interesting things to explore and to possibly identify profitable trading opportunities.”
In an industry where change is the only constant, analysts like Kurush Mistry continue to adapt, innovate, and provide valuable insights into one of the world’s most critical commodities.
