I'm posting this graphic for only one reason. There is a reader that follows this much more closely than I do. Every week the reader tracks the same metrics and was one of the few that has called out the EIA on "fudging" the data it reports. The EIA is forced to use a "fudge factor" to explain away 500K bbls of lost oil every week, plus or minus a few hundred thousand. I never would have known but the reader pointed that out about a year ago. And it's true. One can easily find the small print in the weekly EIA stats in which the EIA points out they need to place a "fudge factor" in the data to make the "books balance."
So, now this, from twitter this past week:
Macht nichts but this comment by HFI Research would have meant nothing to me had I not blogged, and had a reader not pointed this out to long ago.
HFI is an anti-shale perma-bull on price. He has been wrong over and over for the last 7 years. He really got his clock cleaned on natural gas and has changed his tune to being a seasonal trader--because the long term trend was so different from his expectations.
ReplyDeleteAs far as the adjustment factor, it is common knowledge. And HFI doesn't even understand it properly. He does silly things like putting it all against production. But since it is a balancing factor, it might reflect issues in production, consumption, inventory, exports, or imports. No reason to put it all against production. EIA has explained this well in a detailed webinar (and in long notes on their site). But HFI is too fluff headed to read such stuff.
Lately he's been combining the weekly adjustment with the monthly 914 which makes absolutely no sense. The adjustment is only for weekly numbers.
Agree, a 1,000%. I've said the same thing in the past regarding HFI. The point I was trying to make was this: had I not blogged and had a reader not alerted me to the "fudge" factor I would not have known about it.
Delete"As far as the adjustment factor, it's common knowledge."
That just shows you how dumb I am when it comes to the oil business, and I try to point that out at least once a week that I have no formal training in the oil business and no experience in the oil sector. That's why I started the blog -- to try to learn as much as I could about shale.
I missed the 1980s boom in North Dakota. In 2007, the shale revolution in Montana was seven years old and moving to North Dakota. I just happened to catch it and in 2007 I realized that the Bakken phenomenon had "legs."
So, now I'm posting stuff for my own education. I was completely unaware of the EIA "fudge factor" of which everyone else knew.
Likewise, everybody figured out the GME scam as soon as it occurred. It took me 24 hours to see what was going on. I'm slow and have an awful memory; that's why I have to keep blogging.
Thank you for taking time to write. Amazing how much readers teach me.