Friday January 20, 2006

Matt Simmons : ''Missing barrels'' reveal bad data

peakoil.com -> home.businesswire.com :

From 2004 through 2005, the world produced almost 650 million barrels more oil than demand consumed, according to the accepted International Energy Agency model. But where are these barrels of oil? "Little of this glut has shown up in observed petroleum stocks," writes Mr. Simmons, author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, in the January issue of World Energy Monthly Review. "In fact, as demand for oil continues to grow, daily usage rates indicate many key stock points are at historic lows."

Faulty measurement models, "despite a great deal of rhetoric about better transparency," are to blame for inaccurate estimates of global supply, he asserts, leading to the perceived supply gluts. Not only is the supply side lacking helpful data, Mr. Simmons writes, but "the world has no system to record the physical use of almost all oil products and also lacks accurate reports of crude-oil refinery runs."

"The whole reporting system for the global oil supply is badly in need of an overhaul," Mr. Simmons concludes, adding that we are facing the "dangerous ... prospect of suddenly running into shortages while supply-and-demand models report massive gluts."

See also :

1. Simmons expects oil to hit $250 per barrel
2. Troubled future for world oil supply
3. Peak Oil on Time Magazine

(2006-01-20 11:18:03 SGT) [Energy] Permalink

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