With shadow technology from space ... an emerging company reveals the storage of China and OPEC oil

Available information about oil stocks around the world is useful for knowing the shortage or surplus in the market, and this information is sought by many countries and institutions, and is provided by a company in Silicon Valley called "Orbital Insight".

The US state of Oklahoma, which has dozens of white oil tanks surrounding the small southern town, is the largest oil hub in the United States.

Traders, analysts and energy companies are making great efforts to find out the amount of oil in these tanks, which affects the supply side of the equation that determines the future cost of the commodity.

But this information becomes more valuable when you add 27,000 floating or mobile tanks to reveal the amount of storage around the world, especially at this time when everyone asks about it.

This is precisely what the emerging and unknown company Orbital Insight provides, providing data and analyzes derived from remote sensing tools, such as satellites and mobile phone coordinates.

Founded in 2013, Orbital not only tracks global oil supplies using shadows, but also by bouncing radar pulses from oil tanks.

Along with oil companies and leading analysts, the startup has caught the attention of big investors, including the Alphabet's investment arm JV, Goldman Sachs and Chevron, who together have poured more than $ 125 million into the company.

Images from space
More than two thousand satellites around the world collect and distribute all kinds of information, from communications to weather patterns.

Orbital uses information from more than 200 of them, according to the company's website. Some of this information is high-resolution images of small squares of the planet, while others are taken from radar beams.

James Crawford, the company's chief executive and former engineering director at Google, said the first challenge to track oil supplies was to map all of the world's oil tanks.

The company relied mainly on what is called "computer vision", as computer images feed what tanks look like from space until computers begin to recognize them on their own.

During the process, the company found thousands of floating roof tanks that represent most of the world's oil stores. These tanks have mobile caps that rise and fall depending on the amount of oil in them to prevent emissions and the accumulation of explosive gases.

The company uses computer vision and mathematical equations to measure two shades of these cabinets. The shade on the outside helps the company calculate the volume of the tank, while the shadow formed by the edge of the tank shows the height of the roof, which is a sign of how full it is.

The company also measures the fullness of each reservoir using radar beams emitted by satellites. Radar is especially useful for parts of the planet covered by clouds, which can penetrate these beams.

"We get two facts: one from the edge of the tank and the other from the surface ... You can see how full the tank is by looking at the difference between these two bounces," Crawford said.

In general, Orbital analyzes about 300 million km2 of images each year to estimate global volumes of oil storage, according to the company.

"Crazy increase" in storage
Demand for oil has fallen since last February. Ban laws have hindered the spread of the new Corona virus, the transport sector that uses most of the oil-based fuels in the world.

Global oil demand will drop by nearly 30% in April, compared to the same month last year, according to research firm Rystad Energy's forecasts.

"Voluntary cuts cannot be large enough to make up for an average of 19 million barrels per day, which is the average loss of demand between April and May due to the Corona virus," Goldman Sachs analysts wrote to Michelle Vigna in a note on Monday. .

As demand falls to historic low levels, oil tanks fill quickly, and Orbital's database, which it says is "probably the world's largest directory of tanks and tanker sites," showed that the amount of oil in storage increased by more than 200 million barrels compared to last year.

The company said that the vast majority of those barrels (about 140 million barrels) were added only during the past 30 days, and noticed a sharp rise in storage, especially in China and among OPEC countries.

CNN reported earlier this month that China was taking advantage of the moment when oil was cheap to build up its strategic reserves.

Meanwhile, storage among OPEC producers is increasing in part because, despite the collapse in demand, they were increasing production, according to previously reported by Business Insider.

"Because of what is happening in China and OPEC, we are facing unprecedented global storage operations," Crawford said, adding that China's storage tanks are approaching the capacity of two-thirds.

On Monday, markets showed a reaction to this bad news. The price of US crude for next May fell to two negative figures for the first time in history.

It turned out at the end of the day that it was a storage problem. With no place to store oil, there were no actual buyers bidding for future contracts for the next month, so traders had to pay them to take the oil.