Those Missing Oil Barrels Have Been Found!

The problem won’t go away completely, but the size of the “missing” barrels will be reduced significantly. And our understanding of the US market would improve too. So will the reputation of the EIA.The origins of the problem are mixed. US oil production has nearly tripled in the past 15 years, challenging the EIA’s data-collection operation; in the same period, Washington lifted a de facto crude export ban too, further complicating estimating supply and demand balances. But in the background, the problem is money. Facing a more complex task, the EIA should have received extra funding. The opposite happened: in real terms, adjusted by inflation, its 2023 budget is smaller than it was in 2010.Last year, the EIA’s computer system crashed, delaying the publication of several market-moving reports for more than a week. EIA insiders describe the agency’s IT as prehistoric. But it wasn’t alone. The Department of Agriculture last year delayed for two weeks key data on grain exports due to a system glitch. Grain traders have complained over the last few years about the accuracy of other data, probably because the USDA doesn’t have a budget big enough to improve how it collects information from farmers.  Earlier this year, the Commodity Futures Trading Commission also had to hold up several times the publication of a closely watched weekly report after a trading firm suffered a ransomware attack. The report, called the Commitment of Traders, provides the only snapshot available on whether investors in energy, metals, and agricultural markets are bullish or bearish. When considering that the CFTC not only publishes data, but also regulates the commodity market, the publication delay is alarming.Outside the US, the problem is even more acute – few governments publish timely data on their domestic commodity market. The industry relies increasingly on commercial data providers. The public is the loser.