Energy Prospectus

Stunning 7.9-Million-Barrel Increase In Crude Oil Supply Reported By The Energy Information Administration (EIA)
Phil Flynn
November 07, 2019

Stunning 7.9-Million-Barrel Increase In Crude Oil Supply Reported By EIA
EIA data is basically worthless on a weekly basis
After nice rally in Natural Gas, seeing some profit-taking ahead today's EIA data


Excerpt:
The Phil Flynn Energy Report
Are You Ignorant or do you have an Agenda?

Are you ignorant or do you have an agenda? Well, maybe both. One reason I might be both is that I was shocked at the stunning 7.9-million-barrel increase in crude oil supply reported by the Energy Information Administration (EIA). The reason why I was shocked was based on the most reliable metrics and sources available that indicated the increase in crude supply should have been substantially lower. I am aware that predicting weekly oil inventories is a difficult endeavor but for some of the smartest people in the oil industry to be so far off, it makes one look to the data to find out how we could all get it so wrong.

One glaring difference was a massive drop in U.S. oil exports. According to the EIA, somehow oil exports plunged by an incredible 956,000 barrels a day. Exports fell from 3.327 million barrels a day to just 2.371 million barrels a day. Over a 7-day period that adds to a drop in exports of a whopping 6.692 million barrels. Yet based on some of the best estimates and tanker tracking firms, the reality is that exports last week actually surged. Not just a little but perhaps as high as a record 4.4 million barrels per day. Actual ships with actual barrels. But wait! You are ignorant or you have an agenda if you think that matters.

That is the view of the Energy Information Administration Petroleum Market Analyst Mason Hamilton. Mr. Hamilton went on a twitter storm defending his data. Of course, he does say that his, “tweets and views are my own. It's my data - I'll chart how I want to. Save me from the bunker. Have a nice day.” So while Mr. Hamilton is the lead petroleum analyst for the EIA he is not speaking for the EIA.

https://www.futuresmag.com/2019/11/07/s ... nformation

As I have posted here many times:
1. EIA's weekly numbers are nothing by wild ass guesses ("WAG") and they are based on formulas, not physical measurements. EIA does not have recording devices on over a million oil & gas wells or thousands of storage tanks in the U.S.
2. I have followed EIA reports for over two decades. The weekly numbers are wrong at least half of the time and their long-range forecasts are wrong most of the time.
3. Do they have an "agenda"? EIA is part of the Department of Energy based in Washington DC. I believe that to get a job there you must (a) believe in Climate Change with all your heart, (b) dislike the dirty oil & gas industry and (c) agree to do whatever you can to keep fuel prices low. The folks that sign the paychecks at EIA want low fuel prices.

That said..
> Imports and exports do flop around a lot, usually because of weather in the Gulf of Mexico.
> Making estimates is tough in this business. Keep in mind that it is a HUGE industry and 7 million barrels in inventory one way or the other is just a "rounding error".

IMO traders and investors over-react to the weekly EIA report, but that is not going to change.