March 23, 2016: I thought the whole thing was a non-story. Apparently, so does someone else --
“A lot of it is in China [in the form of stockpiles], there’s some in India, some sitting in pipelines and some in ships,” he said. The IEA, an energy policy adviser to the OECD countries, does obtain data from non-OECD countries, contrary to some assertions, but it’s not perfect, the official stressed. “Get over it,” is how [IEA's head of oil industry and markets division Neil] Atkinson summed up his view on the hullabaloo.
David Hewitt, Managing Director at Credit Suisse and fellow panelist at the SIEW event, agreed, saying that some traders seemed to have seized upon the “missing barrels” story in their hunt for reasons to be bullish about the market.
Incidentally, both Atkinson and Hewitt were also dismissive about the other bullish ghost still lingering over the market — the “production freeze” initiative by some OPEC and non-OPEC producers. Anyone got a number for oil’s Ghostbusters?
Yesterday/today, major news outlets ran the story: IEA lost track of 800,000 bopd last year.
It's an attention-getting headline, but it's a non-story.
The world produces 96 million bbls of crude oil per day. 800,000 / 96 million = 0.0083 = 0.8%. That's a rounding error.
800,000 bopd x 365 days = 292 million bbls for the year. 292 million / 90 million = 3 days worth of global consumption.
Global strategic petroleum reserves: 4.1 billion bbls; 292 million / 4.1 billion = 7.1%
- The US Strategic Petroleum Reserve capacity: 751 million bbls
- Chinese SPR: about 100 million bbls now; goal: 700 million bbls
- sloshing around in ocean-going tankers that for whatever purposes the captain never submitted the paperwork
- in the Bakken rolling stock that has been turned into storage
- in storage tanks in Saudi Arabia; they don't want to cause the price of oil to drop any farther
- in Harold Hamm's pipelines
- in the "secret" Keystone XL pipeline that was built and no one knows about
- in a big storage tank under Hope, Arkansas
- in Kenya
What drives me nuts is how long it takes the US government to report monthly import data. They should have that data the day after the month ends, but, in fact, it's about 45 days late (plenty of time for insiders to act).