Flow

Flow refers to observable buying or selling activity from market participants and is often used by traders to interpret who is active in the market and why. In energy markets, flow commonly originates from producers hedging output, refiners securing feedstock, utilities locking in fuel or power supply, or financial players expressing speculative views. Unlike fundamentals, which evolve over time, flow reflects immediate behaviour and can move prices quickly, especially in less liquid markets. Persistent flow in one direction can push prices higher or lower even in the absence of new information. Traders analyse flow to distinguish between hedging-driven trades and speculative positioning, as each has different implications for price sustainability. For example, producer selling may cap rallies, while speculative buying can amplify momentum. Flow is also used to gauge liquidity conditions and market sentiment. Understanding flow is particularly important around key events such as contract expiry, roll periods, or major data releases. In practice, flow analysis complements both technical and fundamental analysis, helping traders interpret short-term price movements and adjust positioning accordingly.