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OPEC, IEA or EIA Completely Wrong in 2020 Oil Market Analysis

Consumption

Somebody big has got their analysis of the 2020 oil market flat wrong.

That’s the bottom line from a comparison of supply-and-demand forecasts provided by OPEC, the International Energy Agency in Paris, and the U.S. Energy Information Administration. The Organization of Petroleum Exporting Countries agreed in December to deepen output curbs until the end of March.

OPEC’s own research team sees that pact continuing to drain global stockpiles throughout 2020. By contrast, the IEA and EIA see inventory levels rising — even if the deal gets implemented in full. And even if were to be extended for the entirety of 2020.

The OPEC+ group agreed in December to lower their combined output target by a further 500,000 barrels a day, plus a voluntary additional reduction of 400,000 barrels a day from Saudi Arabia, which depends on everybody else meeting their targets.

OPEC’s latest forecast shows global oil inventories falling at an average rate of almost 100,000 barrels a day over the course of this year assuming the December deal is implemented as agreed and runs through March. That rate of draining could hit 300,000 a day if the measure were to last throughout 2020. Even if the group fails to implement the deal in full, with output remaining at its December level, OPEC’s numbers show there would still be a small decline in global inventories this year.

The IEA and the EIA both have very different, and less-bullish, outlooks. Both see stockpiles continuing to build, even if the agreed output cuts were to be implemented fully and extended for the whole year.

The same differences are apparent in the views of the three agencies on the effectiveness of the OPEC+ output cuts since they were introduced at the start of 2017.

OPEC’s supply-demand balances show that global oil stockpiles have fallen by 653 million barrels since the output cuts were introduced at the start of 2017, with draws in both 2017 and 2019 offsetting a small build in 2018.

Once again, though, data from the IEA and the EIA both imply that the output restrictions have done no more than limit the size of global stock builds since the start of 2017. After initial draws in 2017, stockpiles were replenished the following year and then remained essentially flat in 2019. The net result, according to the EIA, is an increase in global oil inventories of 100 million barrels between the start of 2017 and the end of 2019, while the IEA data show them rising by 142 million barrels.

So where is all this oil? Well, each agency will have slightly different things that it counts, different methods for counting and then, of course, their assessments can differ.

Divergences aside, OPEC and its allies remain resolved to press on with output cuts aimed at draining excess stockpiles, Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said in a Jan. 13 interview on Bloomberg television.

“Our endeavor in OPEC+ is to try to bring inventories to a certain level, where it is within the contours” of recent years, he said. That range should be around the average of the last five years and the period from 2010 to 2014, he said. That suggests that the group doesn’t have a precise target.

OPEC’s latest monthly report pegs OECD commercial oil stocks at 2.92 billion barrels at the end of November, a little higher than the 2.91 billion reported by the IEA. That puts inventories at between 8.9 million barrels (IEA) and 17.5 million (OPEC) above the average level for the last five years.

But there is one thing on which the IEA and OPEC do agree.

OECD commercial stockpiles are sufficient to cover 60.6 days of forward demand, 0.6 days below their latest five-year average. This is a much more useful measure of stockpiles than simple volume. And it would suggest that there’s agreement that OPEC has got inventory levels back to at least one of its measures of success. Now all it has to do is keep them there over the next two years as the high inventory levels of 2015 and 2016 drop out of the rolling five-year average.

RIGZONE



231 Comments on "OPEC, IEA or EIA Completely Wrong in 2020 Oil Market Analysis"

  1. makati1 on Thu, 23rd Jan 2020 3:38 pm 

    For Davy: “Being a bully on the internet is a sure sign of insecurity and weakness…”

    https://www.zerohedge.com/markets/blain-plague-famine-trump

    AMEN!

  2. Cloggie on Thu, 23rd Jan 2020 3:40 pm 

    Now you’re talking!

    Largest money bag in the world BlackRock (7 trillion €) signals that climate change should be taken serious:

    https://www.newyorker.com/news/daily-comment/citing-climate-change-blackrock-will-start-moving-away-from-fossil-fuels

    “CITING CLIMATE CHANGE, BLACKROCK WILL START MOVING AWAY FROM FOSSIL FUELS”

    BlackRock gained some notoriety by early identifying the European Golden Decade.

  3. Davy on Thu, 23rd Jan 2020 3:46 pm 

    “For Davy: “Being a bully on the internet is a sure sign of insecurity and weakness…”

    Look in the mirror hypocrite. First comment is an attack. Pathetic

  4. makati1 on Thu, 23rd Jan 2020 3:51 pm 

    Well, the virus is already in Amerika. Three cities so far and growing. Gonna be an interesting year in many many ways. Are you prepared for a lockdown in your area? Buckle up and pass the popcorn.

  5. Cloggie on Thu, 23rd Jan 2020 3:54 pm 

    Boeing not only facing passenger and airline strike but additionally a PILOT strike:

    https://www.rt.com/usa/478938-boeing-737-max-pilots-trust/

    “‘Like a Jenga game’: Pilots shred Boeing as it prepares to resume 737 MAX production ASAP, citing ‘positive feedback’ from pilots”

    “It’s like a Jenga game, [trust] gets higher and higher, and then it tumbles down,” Dennis Tajer, spokesman for the Allied Pilots Association, which represents 15,000 American Airlines pilots, told the Financial Times.

    The internal communications, which were released by Boeing following an internal probe, were “beyond our worst nightmares,” Tajer added, comparing the messages to “a poorly written screenplay that no one would believe – but it happened.””

    “The company also enjoys “zero trust” from the 10,000 members of the Southwest Airlines Pilots Association, which is suing Boeing, according to union head Jon Weaks. The association brought a suit against the company last year, accusing it of rushing a faulty aircraft “into the hands of trusting pilots.”

    Confidence isn’t only rock bottom in the US. Jon Horne, who heads up the 40,000-member European Cockpit Association, said trust in Boeing was “unequivocally” at an all-time low, adding that it was not the role of pilots to do “PR stunts” for the company with rosy testimonies.”

  6. makati1 on Thu, 23rd Jan 2020 3:55 pm 

    Davy, once again, you prove my assertion, and the truth of the quote. The quote was by another person on your favorite site, Zero Brains. Read the referenced article. LOL

  7. Cloggie on Thu, 23rd Jan 2020 3:58 pm 

    Stop air traffic to China!

    https://www.dailymail.co.uk/health/article-7920907/Coronavirus-fears-Scotland-two-Chinese-patients-rushed-hospital.html

    “SIX UK patients are tested for coronavirus: Suspected victims are taken into isolation after returning from Wuhan with flu-like symptoms as Health Secretary is urged to order checks on passengers on ALL flights from China”

    Potential cause virus: eating BATS!

    https://www.dailymail.co.uk/news/article-7920573/Revolting-footage-shows-Chinese-woman-eating-bat-scientists-link-coronavirus-animal.html

    “Revolting footage shows Chinese woman eating a whole bat at a fancy restaurant as scientists link the deadly coronavirus to the flying mammals”

  8. Davy on Thu, 23rd Jan 2020 4:10 pm 

    “The quote was by another person on your favorite site, Zero Brains. Read the referenced article. LOL“

    You use it as much as I do hypocrite cyber bully. Lol. You proved nothing about me just how pathetic you are!

  9. Cloggie on Thu, 23rd Jan 2020 4:10 pm 

    Soros thinks that Facebook will bring Trump to victory in 2020, once again!

    https://www.spiegel.de/wirtschaft/soziales/weltwirtschaftsforum-in-davos-im-live-ticker-a-d13901c9-ff68-4dc5-9c4f-681760f2be07

    He is right!

    The internet is winning over the media of the Soros bunch, regardless who owns the internet platforms.lol

  10. Cloggie on Thu, 23rd Jan 2020 4:13 pm 

    “The Alternative Media Can Defeat the Mainstream Media – Here’s the Game Plan

    This memo would make Saul Alinsky proud”

    https://russia-insider.com/en/media-criticism/alternative-media-can-defeat-mainstream-media-heres-game-plan/ri23703

  11. I AM THE MOB on Thu, 23rd Jan 2020 4:34 pm 

    George Soros warns Trump of potential economic doom before election

    https://www.cnbc.com/2020/01/23/george-soros-warns-trump-of-potential-economic-doom-before-election.html?__source=facebook%7Cmain&fbclid=IwAR1VkdBZPaEaqdv9d908eqo-Scbo38rwQavLjr10rNn-PI0ieLK4B8BJk5Y

    Who runs the world?

    George of the jungle!

  12. Cloggie on Thu, 23rd Jan 2020 4:46 pm 

    Who runs the world?
    George of the jungle!

    Not long anymore.

    Trump, Brexit, Putin, China, AfD, Salvini, Iran, Iraq, Syria… it doesn’t look good at all for uncle George, i.e. mobster’s tribe. The giant is stumbling, vassals smell blood:

    https://www.rt.com/news/387313-us-losing-leadership-eu-mogherini/

    “‘US losing world leadership, Europe can replace it’ – EU top diplomat Mogherini”

  13. Cloggie on Thu, 23rd Jan 2020 4:59 pm 

    The British left is quietly distancing itself from Hillary C.:

    https://www.theguardian.com/commentisfree/2020/jan/23/hillary-clinton-is-done-trying-to-be-liked

    “Hillary Clinton is done trying to be liked”

  14. I AM THE MOB on Thu, 23rd Jan 2020 5:14 pm 

    Prince Charles warns hatred ‘still lurks’ on 75th anniversary of Auschwitz liberation | The royal says the “lessons of the Holocaust are searingly relevant to this day” as he joins world leaders in Israel.

    https://news.sky.com/story/prince-charles-to-warn-hatred-still-lurks-on-75th-anniversary-of-auschwitz-liberation-11915613

    We must never forget what happened to the poor and innocent jews.

  15. I AM THE MOB on Thu, 23rd Jan 2020 5:38 pm 

    Police bust ring accused of smuggling 10,000 migrants to UK

    https://apnews.com/861bc2870656e24d54f2e7d6fe66f6af

  16. full bagged supremacist muzzie jerk on Thu, 23rd Jan 2020 5:52 pm 

    now we have two replacement for muzzies. one replaced muzzie died like a dog baghdadi and the other muzzie also died like a dog soleimani

    these new muzzies are not muzies but quote muzism extensively and is a practicing muzzie
    should they’re roasted they will be burried at sea as muzzie by dutch navy.

    but they’re not muzzie

    head spun

    world muzzie bag day 8 days away, feb 1st.

    show your support by putting a shopping back on your head when you go driving or outside.

    put a maple leave over your genitals to support supremacist muzzies

  17. Davy on Thu, 23rd Jan 2020 7:49 pm 

    “You use it as much as I do hypocrite cyber bully.”

    Hay, wait a second…. You weren’t the one that promised to attack everyone until death do us all part.

    That would’ve been me. The board’s official cyber-mascot.

    The hypocritical cyber bully dumbass extraordinaire!

  18. Duncan Idaho on Thu, 23rd Jan 2020 8:54 pm 

    “Climate change has stopped being something to argue about. When you breathe in the ash and feel the pain in your heart, you can no longer deny it”

  19. full bagged supremacist muzzie jerk on Thu, 23rd Jan 2020 9:08 pm 

    just a reminder and public service announcement

    8 days to world muzzie bag day on feb 1st

    20 days to ceremonial day of greater nederland

    show appreciation to either with shopping back on head when outside home

    cover private part with maple leaf

    thank you for supporting global muzzie bag day and greater nederland day

  20. full bagged supremacist muzzie jerk on Thu, 23rd Jan 2020 9:10 pm 

    can i have pledge from supertard for support?

    8 days to world muzzie bag day on feb 1st

    20 days to ceremonial day of greater nedertardland

    show appreciation to either with shopping bag on head when outside home

    cover private part with maple leaf

    thank you for supporting global muzzie bag day and greater nederland day

  21. claes on Thu, 23rd Jan 2020 9:26 pm 

    I pledge my support…

    full bagged supremacist muzzie jerk on Thu, 23rd Jan 2020 9:10 pm

    can i have pledge from supertard for support?

    8 days to world muzzie bag day on feb 1st

    20 days to ceremonial day of greater

  22. I AM THE MOB on Thu, 23rd Jan 2020 9:31 pm 

    You have my pledge.
    Now can you go away?

    full bagged supremacist muzzie jerk on Thu, 23rd Jan 2020 9:10 pm

    can i have pledge from supertard for support?

    8 days to world muzzie bag day on feb 1st

    20 days to ceremonial day of greater nedertardland

  23. Duncan Idaho on Thu, 23rd Jan 2020 9:42 pm 

    A Warning To Republicans: The World Is Watching

  24. This is Bazzare Insane Incel JuanP on Thu, 23rd Jan 2020 10:37 pm 

    Duncan Idaho on Thu, 23rd Jan 2020 9:42 pm

    A Warning To Republicans: The World Is Watching

  25. This is Bazzare Insane Incel JuanP on Thu, 23rd Jan 2020 10:52 pm 

    full bagged supremacist muzzie jerk on Thu, 23rd Jan 2020 9:08 pm

    just a reminder and public service announcement

    8 days to world muzzie bag day on feb 1st

    20 days to ceremonial day of greater nederland

    show appreciation to either with shopping back on head when outside home

  26. REAL Green on Fri, 24th Jan 2020 12:31 am 

    We spelt bizarre rong again Davy.

    We need to wurk more REAL Harder on are English

  27. fwsmj on Fri, 24th Jan 2020 1:59 am 

    grate comment everyone
    thanks

  28. Davy on Fri, 24th Jan 2020 4:53 am 

    “Climate change has stopped being something to argue about. When you breathe in the ash and feel the pain in your heart, you can no longer deny it”

    Idaho, I agree but it is what comes afterwards that needs to be argued about and FAKE Green liberal response of green new deals is not it.

  29. fwsmj on Fri, 24th Jan 2020 7:53 am 

    grate comment supertard
    thanks

    fyi 7 days to world muzzies bag day feb 1st
    41 days to grater nedertardland

    please show your support. put maple leaf over your private parts

  30. Cloggie on Fri, 24th Jan 2020 8:42 am 

    Germany now proposing what I have been promoting here for some time: turn Africa into the hydrogen pumping station of the world

    https://www.oldenburger-onlinezeitung.de/nachrichten/karliczek-will-wasserstoff-aus-afrika-importieren-31264.html

    “Karliczek wants to import hydrogen from Africa”

    Because nowhere can renewable hydrogen be produced more efficiently as in Africa. Superb solar conditions, plenty of cheap labor.

    And as such help these people to serious money and persuade them to stay at home.

    “Hydrogen is the oil of tomorrow”

    Exactly right.

    The good minister is prepared to import ca. 50% hydrogen from abroad. If they other 50% is produced at home, Germany would enjoy acceptable energy self-sufficiency levels.

  31. Davy on Fri, 24th Jan 2020 10:18 am 

    “Because nowhere can renewable hydrogen be produced more efficiently as in Africa. Superb solar conditions, plenty of cheap labor.”

    more cloggo talk. Not going to happen like his dreamy fantasy portrayal

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