Thursday, April 21, 2011

Fuzzy Oil

The return back to my tornado ravaged base of operations had the net effect of requiring that we reset our clocks.  That is somewhat along the lines of all-or-nothing nature of Tornadoes. I don't want to make light of others suffering, but 22 casualties is only slightly higher then North Carolina's weekly average for automotive fatalities (19).  There is no doubt that tornadoes make for better pictures.

I did see an interesting bit of infro this morning.

As noted by Matthew R. Simmons in his Twilight in the Desert: The coming Saudi oil shock and the world economy in 2005 the numbers that come out of the oil producing countries – Saudi Arabia in particular- cannot always be taken at face value.
So on the back page of the Wall Street Journal we have a story that indicates that unreliable data out of Saudi Arabia is adding price volatility to the futures markets.
Remember that the some were looking to the Saudis to increase production to make up for the shortfalls from the smaller producers who are in turmoil at the moment.  Libya has had a shortfall of 1.3 million barrels a day, and the Saudis said they would make up 500,000 of that.
Benoit Faucon and James Herron, The Wall Street Journal, April 21, 2011
Saudi Arabia said on Sunday that its production had been at least 700,000 barrels a day lower in March than existing estimates, including those published by the Organization of Petroleum Exporting Countries.
But in a conflicting report
Saudi Oil Minister Ali Al-Naimi said Sunday that oil production from the kingdom was 8.292 million barrels per day in March, down about 800,000 barrels a day from 9.125 million barrels per day in February. Most estimates, including the monthly report of OPEC—which relies on external databases—had seen a rising or stable production at about nine million barrels a day in March.
These are not the first discrepancies to be seen.  In February there was a 105, 000 barrel/day difference between differing reports.
The story ends with the conclusion that there is a lack of hard data to judge the correct numbers.

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