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Two years ago, forecasts about the world’s crude oil demand from the International Energy Agency, the Energy Information Administration, and OPEC diverged by 2 million bpd. Later, the gap narrowed to 1 million bpd. This is still 1 percent of global demand, and the market needs more accurate data.
This is what OPEC researcher Aziz Yahyai told the Joint Organizations Data Initiative this week as JODI seeks to improve the quality of data it receives from and supplies to oil market players.
The ultimate goal is to avoid wild prices swings of the sort we have been seeing increasingly often in recent years, but also to get a clearer picture of the trends in demand and supply that inform all oil-related decisions by both producers and consumers.
There is currently insufficient data on oil inventories in JODI’s databases, and there is scarce info on demand in major consumers—and producers—including China, Russia, and the United Arab Emirates.
“Global stock levels are the source for checking the accuracy of supply and demand numbers. However, the lack/inaccuracy of stocks data makes an accurate assessment very difficult.”, Yhyai said as quoted by Reuters.
In July 2016, he said, oil demand projections for 2017 from the EIA, the IEA, and OPEC varied between 95 million bpd and 97 million bpd. In later months of the year, the discrepancy narrowed but never were in full agreement.
Related: Why Is U.S. Oil So Cheap?
This is normal for all projections: the closer you get to the target period you are making projections for, the more accurate the picture you can draw. However, it is doubtful if the three oil authorities will ever be able to come with completely identical forecasts as they use different sources for their information.
Not all of this data is fact, either. Authorities use both actual reports from the industry and estimates resulting from computer modeling to come up with their supply and demand projections.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.