Crude in 2016. OPEC, the US EIA, the IEA

I have another 30 works in progress, including a drafts on crude and on the XLE … these drafts are a compilation of data, observations, and analysis, fundamentals, databases, spreadsheets, charts, sentiment, notes from conference calls, fireside chats, et cetera.   Taking all that information, and putting it in a easily understandable blog, minimizing the tech-speak (aka geek-speak) is WORK.  However, it is my money, your money, our money,  … and so, as I go thru the relevant information, I am also thinking, and re-thinking, my observations, and investments based on analyses of that information … sometimes, my original opinion remains, and occasionally, fresh information alters my opinion.  More often than not, new information brings with it new questions.  So does one rush to post new information … or attempt to answer the questions?  It would seem answering the questions first would be a prudent course of action … especially where investing your own money is concerned.  Whether you are a Bull, or a Bear, you/I/we have to be prepared that new information, data, evidence, and/or analysis can, and will alter your/my/our  Reward/Risk investing opinions, and thereby our investments, the question is whether you/I/we  will pay attention … or not?

Please bear with me … there are serious USA Energy Sector concerns coming.

  II. b.   US Energy Information Administration   (US EIA)

   So as to not sound like a broken record, I promise to try not to repeat all but a few important observations and/or issues I have commented on and posted in previous blogs, or in my comments here or elsewhere.  Times have changed.  Globally, despite the political system embraced and executed by governments, whether a democratic, elected representative form, or Communism, Socialism, Monarchy, Dictatorship … et cetera … we find commerce, and finances globally linking us together, and for better, or worse, we are no longer isolated ponds.  We are a global pond … toss a stone in the water causing ripples, or waves, and it affects us all.  So, some information must be repeated.
Statistical analysis is a data dependent analysis of “sets”, subsets, and subsets of subsets, and how the subsets “statistically” corelate to the set.  The global markets are the top set.  The USA markets are a top set, but also a subset of the global markets.   Indexes, or Indices, Sectors, industries, sub-Industries, and even companies are all subsets of the global markets and the USA’s markets.  When we analyse data we look to get back usable information, using the past to make projections about the short term, intermediate term, and long term future.
The accuracy, and the integrity, of an analysis depends on the data the analyst has, the data the analyst doesn’t have, his/her education, experience, and insights, as well as any biases the analyst allows to creap into his/her work.  However, as we expand our analysis, we may find limitations in that we may not have necessary, additional raw “data” and we can get into trouble if we substitute “estimates”, or “guess-timates” for missing data in order to calculate a potential outcome anyway.  Some call this analysis  modelling.
    Unfortunately statistical analysis, scenario analysis, and modelling, et cetera … opens the door(s), for others, supplying the data to seek to manipulate those doing their own homework by deliberately, knowingly, supplying misinformation, or false data.  We need to check, double check, and even triple check “data.”  Which requires those doing their own homework, to include checks and balances, multiple sources, to expose data that doesn’t add up.  Look back thru my blogs, I have informed my readers that the OPEC crude production numbers do NOT add up, that OPEC members may be deliberately, intentionally, calculatingly … overstating crude production, …
Currently, the press and short seller focus on the crude going into storage (a subset) hyping “global oversupply”, “domestic oversupply”,  and “glut” is detrimentally masking the troubling issues  with the OPEC “reported” crude production numbers … crude production numbers that DO determine the valuations of USA companies, whole USA industries, the Energy Sector, and it DOES spill over to the other sectors.   
 Why would OPEC disseminate misinformation ??:
   First scenario proffered OPEC purpose … sacrificing price now for market share and then pricing advantage later.  If OPEC member XYZ is reporting 1.1 million barrels of crude production per day, but is actually only producing 1.0 million barrels of crude production per day … the misinformation may be self-serving, forward looking, on expectations that “if” there is an OPEC agreement on crude production “cuts” … member XYZ can offer to “cut”  0.1 million barrels of crude, or 100,000 barrels of fake production per day, and some other OPEC member that isn’t playing the “fudge the production numbers game” takes the hit with (1) real production cuts, and (2) losing market share.
This “fudge the production numbers game” also works against non-OPEC members, like USA shale crude Exploration and Production companies …  getting them to (1) cut REAL production, and (2) losing market share, while cheaters, cutting only imaginary production … profit from increased prices … and INCREASED market share.

Thankfully, someone else has noticed 2 + 2 – 1  doesn’t equal 10 …

  Second scenario (suspected) purpose … OPEC may be undermining the competition in hopes of forcing fire sale priced asset sales for the purpose of cheap additions to their reserves.   If a group, OPEC or not, knowingly disseminating misinformation, collectively works to drive competitors to near bankruptcy, putting USA citizens out of work, intending on offering to buy fire sale priced assets, adding to their reserves, properties reduced to bargain basement prices, even with the assumption of debt … should that group be allowed to make such a purchase? 
   The real penalties the crude short sellers, and the press, are imposing on all of us with short sighted focus on crude storage without double checking production numbers  … are the people losing their jobs now, the people watching their investments in the energy sector evaporate, plus the reductions in Capital expenditures (Cap-ex) now will lead to higher crude prices, higher home heating oil prices, higher nat gas prices, higher diesel and gasoline prices … 
Will the short sellers and press claim ignorance, and also claim they were blameless beneficiaries, or victims, of the misinformation … production misinformation that they should be fact checking, and reporting on, but aren’t … even NOW??

 

 

——  Monday, 3/14/2016 thru Quadruple Witching Friday 3/18/2016  ——-

 

( x)   All Links can be opened in a new tab or new window …

  •  ( xi )  I will be returning and adding more related chart info including links to charts with  daily, weekly, and monthly chart analysis

 

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    Hope the above Crude in 2016.  OPEC, the US EIA, the IEA provides food for thought  for Monday, 3/21/2016 and helps your investing and trading planning today …
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2 thoughts on “Crude in 2016. OPEC, the US EIA, the IEA

  1. I noticed something was amiss nearly a year ago. Saudi Arabia combined with Saudi allies to combat the, allegedly Iranian backed, Houthis (Ansar Allah) in Yemen. Saudi Arabia also was fighting incursions by ISIS. So how was Saudi Arabia keeping up “exports” when it needed a substantial amount of refined petroleum products to support its war effort? Gasoline for light vehicles and generators, Diesel for combat trucks and tanks, kerosene and JP4 for its combat aircraft … not only that but even if the Saudis thought their on hand supplies were sufficient at the start of the conflict … at some point the drawdown of on hand supplies would require replenishment.. Combat aircraft aren’t Cessna’s or Pipers sipping 18 to 21 gallons of fuel per hour … combat aircraft suck fuel down by the ton … and afterburners dump raw fuel into the exhaust for extra thrust. Combat tanks are almost as bad … three gallons per mile … if you are lucky … gas guzzler tax does not apply. Saudi production had to be diverted from export to refineries for internal consumption. For about a YEAR … where is the reporting on that?

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