
Oil Espionage: Traders Spy on Hub With Satellites, Sensors and Infrared Cameras - marklabedz
http://stateimpact.npr.org/oklahoma/2012/09/28/oil-espionage-traders-spy-on-oklahoma-hub-with-satellites-sensors-and-infrared-cameras/
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RobotCaleb
I kept waiting to read the content. I brushed past an initial link. The real
story is [http://www.businessweek.com/articles/2012-09-27/the-oil-
hub-...](http://www.businessweek.com/articles/2012-09-27/the-oil-hub-where-
traders-are-making-millions)

Edit: Article on one page:
[http://www.businessweek.com/printer/articles/73558-the-
oil-h...](http://www.businessweek.com/printer/articles/73558-the-oil-hub-
where-traders-are-making-millions)

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johnrgrace
This isn't a new thing. One thing I did at Enron was to try and figure out the
construction status of power plants being built I read a lot of small local
newspapers, city council minutes, looked for job listing, and called
subcontractors etc. The fun side of trading involves getting a view of the
market which is beyond newspaper articles and reports.

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haliax
That sounds really interesting. How hard do you think it would be to automate
that kind of analysis of newspapers and such? Would love to hear what you
think. Email's in my profile.

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404error
A lot of newspapers have horrible websites. Aside from aesthetics, search is
broken on many of these sites. Another problem is local government, city
council minutes and other information is not made available in digital format.

I work at a newspaper that is a controlled by a corporate office across the
country. (They know best) I also live in a small town that has been slow to
adopt technology.

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ChuckMcM
Given the signals intelligence of small town newspapers I always wondered why
there wasn't a company that gave out really cheap 'site build/management'
software for these folks with a proviso buried deep deep deep inside the terms
of service that gave the hosting company a right to see all the data.

I'd imagine it looks a lot like WPEngine but with a more newsy flair.

~~~
404error
This sounds like a great idea.

Another possible solution would be to crowd source the data gathering. Maybe a
news link aggregator with strict organization.

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rayiner
I'm not sure I get the anger directed at oil traders. Traders help implement
the pricing function of the market. It's a fact that we're going to run out of
oil. You can debate about peak oil, etc, but that's an argument about when
we're going to run out of oil, not if. We hit peak reserves in 1980--ever
since then the rate of new discovery has been less than the rate of
extraction. When it sinks in that we're going to run out of oil, why wouldn't
prices skyrocket? Why does anyone think the market will wait until oil
production actually starts declining in order to price the eventual depletion
into the price of oil?

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nradov
We're never going to run out of oil, just like we're never going to run out of
gold or silicon or gravel or any other mineral resource. But as supply
eventually declines the price may rise enough that petroleum can no longer
feasibly be used as a vehicle fuel or chemical manufacturing feed stock.

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pbhjpbhj
> _But as supply eventually declines the price may rise enough that petroleum
> can no longer feasibly be used_ [...] //

It can still feasibly be used by those who own the oil stock itself. It's not
the inherent cost that is increasing only the market price. As the price rises
the market should work to ensure that every last drop of oil is bled from the
Earth. If the price goes to high then [in a perfect market] it will drop back
to ensure maximum exploitation.

It's only a falling price below the production cost that makes it infeasible
to extract surely?

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nradov
Not really. As oil grows scarcer it becomes more expensive to extract,
regardless of whether you own the mineral rights. At some point the price will
rise high enough that it's cheaper to substitute other goods for petroleum.
For example liquid hydrocarbons can be manufactured using the Fischer–Tropsch
process.

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wtracy
Reading about how much resources these companies are pouring into espionage,
it makes me wonder how much Cushing realy has to gain by keeping this
information proprietary.

If someone is already getting that information out by flying a helicopter over
my installation, I would be tempted to either a) arbitrage the situation by
selling the information myself, or b) erect some tents over the tanks if it's
really worth keeping it secret.

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clarkm
Many companies that own tank farms, carrier pipelines, and other types of oil
transportation / storage infrastructure do exactly this. Production
information is extremely valuable, and since producers are not restricted from
participating in commodities markets, they often just do the trading
themselves.

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at-fates-hands
This little diddy jumped off the page at me:

"Goldman Sachs (GS) predicts that by 2017 the U.S. will be the world’s biggest
oil producer."

How accurate is this statement? Is the reason the gasoline prices here are so
high ($3.89 here this weekend) is because we don't have enough refineries to
convert oil into gas?

*edited for grammar.

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dalore
US gasoline prices are amongst the cheapest in the world. Why do you conclude
they are so high?

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mey
<http://www.wolframalpha.com/input/?i=oil+price>

The cost of oil has gone through the roof, even compared to the 80's oil
crisis where the middle east shut-off gas to the US.

[edit] Removed some comments that referenced a different comment that I
thought was the parent to this comment.

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lifeisstillgood
I really cannot see this as "spying". Its just collecting data that (in a
perfect market?) should be available just for asking.

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malandrew
I believe GS also works with a firm to take satellite photos of a sample of
Wal-mart parking lots across the country. Given that Wal-mart's performance is
known to be a leading indicator of the economy, such information gives some
valuable insight into lots of macroeconomic indicators.

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dedward
While this lets those who are going far above and beyond to gather
information, the solution is for the storage numbers to be published market-
wide, to take away the edge a few have - with enough market pressure this
could possibly happen.

Arbitrage is valid, as is doing your research, inferring what's going on with
a company and then trading on your assumption.

Insiders are barred from influencing the market with their knowledge, but
outsiders who infer what they think is going on, whether it's a sure thing or
not, are perfectly fine.

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confluence
This is brilliant - measuring power use via em sensors under power lines to
get at oil production. I was just thinking last night what I could do with
real-time accurate off grid data to simulate the various parts of the economy.
Imagine if you knew everything and could simulate how it all relates together.

