I have long suspected that there was more to the direction of oil prices than the EIA`s "Weekly Inventory Reports". This is the report that traders depend on to do what they do daily - rush in an out of oil futures thereby causing the fluctuations that we see. In my opinion, only but a handful of very silent analysts have accurate date on the oil & gas industry.
QUOTE http://blogs.ft.com/energy-source/2010/03/...rage-data-flaw/
What`s in an oil storage data flaw?
March 19, 2010 8:10am
by Kate Mackenzie
Dow Jones says it has uncovered some serious shortcomings in the widely-watched weekly oil storage data published by the US Energy Information Agency.
It says the methodology is too dated for today`s complex futures markets. For example, the data is entered manually and difficult to check, and it is not adequately secured, according to the report. Dow Jones is citing a report commissioned by consultants SAIC, and internal EIA emails obtained under the Freedom of Information Act. How important is the flaw, and how are markets likely to react?
The story gives a specific example of errors creeping into the EIA data, and quite possibly affecting crude oil futures:
Second, although the US remains, for now, the biggest consumer of crude oil and products, it`s not exactly calling the shots in world oil markets these days. OECD oil demand is widely thought to have peaked, if not quite yet, then imminently. The real drivers of changing oil demand are Asian countries, particularly China.
And in fact, the EIA data is not seen as all-important, or as infallible. JBC Energy`s analysts fumed in October over the market`s misreading of the data. The American Petroleum Institute also publishes weekly US crude inventory data and the two figures rarely, if ever, match. Furthermore, if the EIA data was considered rock-solid, presumably there would be no interest in the infra-red and other spy style technologies employed by the likes of Genscape, nor any market for the estimates it publishes based on its findings. And the usefulness of storage levels at the widely-referenced delivery point in Cushing, Oklahoma, was the subject of fierce debate last year.
All that said, a new uncertainty over the US storage statistics could add another layer of intrigue to the already opaque world of oil data.
Related links:
China, setting the world`s oil prices (FT Energy Source)
Crude interpretations of stocks data (FT Energy Source)
QUOTE http://blogs.ft.com/energy-source/2010/03/...rage-data-flaw/
What`s in an oil storage data flaw?
March 19, 2010 8:10am
by Kate Mackenzie
Dow Jones says it has uncovered some serious shortcomings in the widely-watched weekly oil storage data published by the US Energy Information Agency.
It says the methodology is too dated for today`s complex futures markets. For example, the data is entered manually and difficult to check, and it is not adequately secured, according to the report. Dow Jones is citing a report commissioned by consultants SAIC, and internal EIA emails obtained under the Freedom of Information Act. How important is the flaw, and how are markets likely to react?
The story gives a specific example of errors creeping into the EIA data, and quite possibly affecting crude oil futures:
First, as Harvey suggests, the US statistics, despite their flaws, may still hold up relatively well on the world stage. The IEA publishes OECD stocks, but only monthly data. Efforts are under way in the EU to improve reporting methodology. As for China, it`s anyone`s guess. And don`t even start on the raging debate over the opacity of oil data from Saudi Arabia, the world`s biggest oil producer.
Second, although the US remains, for now, the biggest consumer of crude oil and products, it`s not exactly calling the shots in world oil markets these days. OECD oil demand is widely thought to have peaked, if not quite yet, then imminently. The real drivers of changing oil demand are Asian countries, particularly China.
And in fact, the EIA data is not seen as all-important, or as infallible. JBC Energy`s analysts fumed in October over the market`s misreading of the data. The American Petroleum Institute also publishes weekly US crude inventory data and the two figures rarely, if ever, match. Furthermore, if the EIA data was considered rock-solid, presumably there would be no interest in the infra-red and other spy style technologies employed by the likes of Genscape, nor any market for the estimates it publishes based on its findings. And the usefulness of storage levels at the widely-referenced delivery point in Cushing, Oklahoma, was the subject of fierce debate last year.
All that said, a new uncertainty over the US storage statistics could add another layer of intrigue to the already opaque world of oil data.
Related links:
China, setting the world`s oil prices (FT Energy Source)
Crude interpretations of stocks data (FT Energy Source)
