How can satellite imagery reveal what’s really happening in Libya’s oil sector these days?

The last few weeks have seen a remarkable turn of events. A blockade that caused the industry’s collapse in 2020 was partly lifted by rebel commander Khalifa Haftar. Oil production has reportedly increased, and could keep rising, if the situation holds.

Recent upheaval in global financial markets has showcased the uncertainty that still exists over when economies will return to normal.

In last week’s blog, we examined Ursa Space data for insights, focusing on crude oil inventory measurements and automobile manufacturing activity indices.

This past week’s sharp sell-off across global financial markets revealed deep concerns over the global economy as long as the coronavirus remains a threat.

Bad news about clinical trials for an experimental COVID-19 vaccine caused investors to recalibrate expectations over when economies might return to pre-coronavirus levels.

Hopes that such a discovery could be found quickly fueled a remarkable rally in the stock market since hitting a bottom in March (Figure 1).

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What is the relationship between crude oil inventories and tanker freight rates? If inventories drop, do oil shipments follow, causing freight rates on that route to increase?

We worked with Nikos Nomikos, one of the world’s top experts on shipping finance and professor at the Cass Business School, to answer these questions.