Archives for: August 2010, 27

Numbers don’t lie. The trick is deciding which ones are important

August 27th, 2010

This is especially the case when we are asked to forecast short and long term prices for crude oil and transportation fuels.

Do the U.S. inventory and demand numbers shown above impact on these prices? The answer used to be “Yes” but now the answer is, “Well sort of.”

The problem is twofold; the first fold being disagreement by the two reporting entities: the EIA and the industry funded American Petroleum Institute (API).

Last week was a good example of the confusion that numbers can create. On Tuesday, August 17 after the markets closed, the API said that crude oil inventories INCREASED the week ending August 13 by 5.9 million barrels, yet on Wednesday, August 18, the EIA came out with a DECREASE of 0.8 million barrels for the same cutoff date of August 13.

Not a bad discrepancy swing of data (6.7 million barrels) if you don’t mind heights.

By: Roger McKnight, Senior Petroleum Advisor

So what was the net result of this mish mash of data? Find out in this week’s Energy Report. For natural gas, electricity commentary and weekly graphs, send us your email to: info@en-pro.com.

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