Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Douglas V. Fant who wrote (30606)	10/11/1998 7:51:00 AM
From: Gameboy	of 95453

The 1998 Oil Glut Hoax The IEA (Paris, France) generates bs oil data and publishes it. It's picked and broadcast worldwide. Here in the US the Dept of Energy incorporates some of the numbers into its own tables. US GAO asked to investigate IEA world oil forecast (Reuters) biz.yahoo.com The Independent Petroleum Association of America said it supported the request for a GAO study. The trade group said its analysis shows the IEA may be over-predicting worldwide crude production. For example, the group pointed out that the IEA forecast that world supply would exceed demand by 3.4 million barrels per day (bpd) during the second quarter of 1998, but the IEA said that only 1.8 million bpd of excess oil showed up in inventories. That leaves 1.6 million barrels of oil per day missing. ''If IEA predictions are not accurate, and the magnitude of oversupply is much less, the market might very well have reacted in a different way in the last 11 months. Oil prices might not have seen their precipitous drop from where they were one year ago,'' the trade group said. The first two quarters of this year, we have taken the US Dept of Energy EIA data as gospel - in other words a build of 1.1 mb/d 1st qtr, and 2.8 mb/d 2nd qtr - but only 1.8 mb/d showed up for the 2nd qtr of 1998 inventories. Adjusting for the second quarter (which appears to have been overstated by 1 mb/d), there has been a build of 1.1 mb/d 1st qtr and 1.8 mb/d 2nd qtr which comes to a total build of 262 mb for the 1st half of 1998. Using the EIA's latest table, we see that the EIA seems to have ignored OPEC cutback compliance and non-OPEC reduction due to low crude prices in their supply figures for 3rd and 4th qtr: The EIA (Dept of Energy) Petroleum Supply & Demand (Oct 1998): biz.yahoo.com Using a downward adjustment of 2.5 mb/d and applying this to the EIA supply/demand table, yields a net draw of 2 mb/d 3rd qtr and 4 mb/d 4th qtr, or a total draw of 180 mb 3rd qtr and a 4th qtr draw at the rate of 120 million barrels per month. By middle of the 4th qtr there will be less crude inventory worldwide than there was January 1st and the draw on crude inventories will be at the rate of 120 million barrels per month. Best of luck, Steve

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