Wednesday, May 3, 2017

Finally -- The Experts "See Through" OPEC -- "Disingenuous" Says One Analyst -- FT -- May 3, 2017

We saw this some time ago. It was represented in the graph at this post and the update at this post. The Financial Times is reporting:
As oil prices languish near $50 a barrel, energy traders are starting to point the finger at one previously overlooked culprit: exports. 

For all Opec’s self-imposed production restraint the group’s exports have fallen by less than their output cuts might imply. Morgan Stanley analysts say that while Opec has hit its target by cutting as much as 1.4m barrels a day of output to try and support the market, shipping data suggests the group’s exports have declined by less than 1m b/d since the start of the year.

Consultancy Energy Aspects echo this view, arguing the discrepancy between the group’s production and exports risked being seen as “disingenuous” by a market that has been rapidly “losing faith” in the group.

Analysts at Energy Aspects say tanker tracking data suggests Opec’s exports have fallen by as little as 800,000 b/d so far in 2017 as some members have supplanted oil lost to production cutbacks with crude from storage, or have freed up barrels for export as they carry out maintenance at domestic refineries. 
One thing not mentioned in the article: the only ones who really know how much Saudi Arabia is producing is Saudi Arabia itself. So we have two problems:
  • trusting Saudi Arabia's numbers (and the rest of OPEC's numbers)
  • the oil coming out of storage
Saudi Arabia is in a fight for its life. Does one think they would change their ways now?

As is it: 200 days until US crude oil is "re-balanced."

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