800,000 Barrels Of Crude Oil Go Missing; IEA Fails To Make Account
Highlighting this week is the report from the International Energy Agency (IEA) which indicates that the incredibly large amount of barrels of oil that have gone missing last year are still unaccounted for. The last time this incident occurs was 17 years ago.
The amount in question is around 800,000 barrels per day. It happens like this, according to IEA – the agency that monitors the data on crude supply and demand – there is a surplus of 1.9 million more barrels of oil pumped in a daily basis. 770,000 of the barrels have said to end up in onshore storage, while 300,000 of them were still in the pipelines.
The 800,000 barrels, meanwhile, are nowhere to be found. In the last three months of 2015, the number has gone up to 1.1 million barrels a day, which is 43% of the estimated over supply. IEA still cannot confirm if the fuel was bought or stocked somewhere else.
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The report from Wall Street Journal cited some analysts saying that the barrel could have been hidden in China. The latter is one of the countries that are outside the Organization for Economics Co-Operation and Development (OECD) and where IEA has no jurisdiction of to monitor data.
This could imply that China, along with other non-OECD countries is storing crude products at a higher rate than those who are members of the organization.
Still, there's the speculation that the discrepancy in numbers could have merely been created by "flawed accounting" and that they don't really exist.
WSJ said that if data error is to be believed, "then the oversupply that has driven crude prices to decade lows could be much smaller than estimated and prices could rebound faster."
Less than two decades ago, a case of missing barrels has come to the attention of the US Congress. According to Financial Buzz, a nonpartisan agency was called to examine the IEA data and they pointed out that sometimes "statistical limitations" can cause errors in the data. Still the "magnitude and direction of these errors are not clear."
