From counting cars at mall and shopping centre parking lots to gauge consumer traffic, to calculating the shadows cast on floating-roof tanks to estimate global crude oil supply, satellite data has become one of the more well-known types of alternative data in the market. With significant numbers of institutional investors realizing the value of this data, we address the current state of the industry, as well as some words of caution when approaching satellite data.

Floating-roof tanks in Cushing, Oklahoma. The crescent-shaped shadows represent the different lid heights, indicating how much oil is stored in the tank.

Fact or fad

Despite many funds being skeptical of the hype around satellite data, it is difficult to dispute academic papers and backtesting results produced by the industry. Take for instance