Friday, March 19, 2010

Oil data isn't really reliable

The U.S. government faces shortcomings in producing its oil-inventory data, according to internal Department of Energy documents, casting doubt on figures that affect the production and prices of the world's most important industrial commodity.

The documents, obtained through a Freedom of Information Act request, expose several errors in the Energy Information Agency's weekly oil report, including one in September that was large enough to cause a jump in oil prices, and a litany of problems with its data collection, including the use of ancient technology and out-of-date methodology, that make it nearly impossible for staff to detect errors. A weak security system also leaves the data open to being hacked or leaked, the documents show...

Crude Correction

The anatomy of one change in a single week:
  • Expected oil inventory change week of 9/11: -2.5 million barrels (from Dow Jones survey)
  • Reported change: -4.7 million barrels
  • Cushing "correction": -1.7 million barrels
  • So, without the correction in Cushing, Okla., the nation's most important commercial-storage facility, oil inventories would have dropped nationwide by only three million barrels, relatively close to analysts' expectations.
  • Oil prices rose 2.2%

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