Natural Gas Storage Forecasts: Is the Crowd Wiser?

38 Pages Posted: 19 Dec 2019 Last revised: 7 Mar 2020

See all articles by Adrian Fernandez-Perez

Adrian Fernandez-Perez

Auckland University of Technology

Alexandre Garel

Audencia Business School; Labex ReFi

Ivan Indriawan

Auckland University of Technology - Department of Finance

Date Written: March 6, 2020

Abstract

This paper examines the usefulness of crowdsourced relative to professional forecasts for natural gas storage changes. We find that crowdsourced forecasts are less accurate than professional forecasts on average. We investigate possible reasons for this inferior performance and find evidence of a greater divergence of opinions and a lower incorporation of publicly available information among crowd analysts. We further show that crowdsourced consensus forecast does not influence the market’s expectation of gas storage changes beyond what is already contained in professional consensus forecast, suggesting that crowdsourced forecasts provide little new information. Overall, our results indicate that the incremental usefulness of crowdsourced forecasts for gas market stakeholders is very limited.

Keywords: Analyst, Forecast, Crowdsourcing, Natural Gas Inventory, EIA

JEL Classification: G18, Q43, Q47, C53

Suggested Citation

Fernandez-Perez, Adrian and Garel, Alexandre and Indriawan, Ivan, Natural Gas Storage Forecasts: Is the Crowd Wiser? (March 6, 2020). Available at SSRN: https://ssrn.com/abstract=3498025 or http://dx.doi.org/10.2139/ssrn.3498025

Adrian Fernandez-Perez

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand
+64 9 921 9999 (Phone)
+64 9 921 9940 (Fax)

Alexandre Garel

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312
France

Labex ReFi ( email )

79 avenue de la République
Paris, 75011
France

Ivan Indriawan (Contact Author)

Auckland University of Technology - Department of Finance ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

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