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Oil on water levels have reduced by as much as 17% since the beginning of the year, according to new figures generated by Vortexa, a newly launched analytics platform focused on the oil markets. The figures point to the effect of the December 2016 agreement between OPEC and 11 non-OPEC member countries, aimed at correcting the global over-supply of oil. It is a leading indicator of the global stockpiles of oil, particularly as water-based oil is more likely to be moved and consumed first.

According to Vortexa co-founder and CEO Fabio Kuhn:

“The effect of the OPEC agreement on the global balances of crude oil is one of the most important questions in the oil market at the moment, but until now access to accurate and reliable data on the topic has been limited…We have seen a significant reduction in global oil supply since January, with oil on water going from 978 million barrels on January 1st to 812 million barrels on April 3rd.”

With an average level of 930 million barrels over the last year, oil on water volumes are sizeable and are known to be the first level of stock to respond to changes in oil supply. These changes are a signal that the rebalancing is happening faster than many in the market believe.

What is oil on water?

Oil on water in this context is any oil that is being stored on water for more than seven days, including with global tanker fleets. This is an important forward indicator of international oil flows.

Who is Vortexa?

Vortexa is an analytics platform that absorbs billions of data points from hundreds of sources using AI, deep learning algorithms and Bayesian reasoning to reveal the past, present and future movement of oil globally.

It is the first analytics platform using AI capabilities in the energy trading industry to provide an unprecedented view of global oil movements. Founded by a team with extensive energy market and technological expertise, its launch comes following a successful test phase with five of the industry’s largest physical energy traders, and backing from prominent tech investors in Europe.

Kuhn further commented:

“The massive growth in data, particularly coming from new satellite constellations, together with recent breakthroughs in artificial intelligence allow Vortexa to solve extremely complex, large-scale problems directly relevant to the energy industry.”

Oil traders now have access to information on crude oil flows worldwide with a superior level of detail, accuracy and speed. In the next few months, the company will also be covering refined products followed by a real-time view of the global supply and demand balance for oil, across the barrel.

Who is behind Vortexa?

Vortexa is backed by investors including Skype co-founder Jaan Tallinn, Michael Halbherr, former CEO of HERE, one of the largest mapping, navigation services and location solutions companies in the world; and venture capital firm Mosaic Ventures, whose partners have a proven track record of investing in category leading innovative companies such as Alibaba, Criteo and King.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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