Improving oil market data may not appear to be one of the burning energy issues before Congress or the White House, but maybe it should be.
Absent from the headlines on the White House's recently released Na- tional Energy Policy (NEP) recommendations (see related articles, pp. 20-21) is a proposal to direct the Secretary of Energy to work with producer and consumer-country allies and the International Energy Agency "to craft a more comprehensive and timely world oil data reporting system."
According to one of the NEP recommendations, the US must work with oil producers to improve the timeliness and accuracy of the data that guide global oil markets.
"A lack of timely and accurate data relating to both oil production and inventory levels has contributed to the price volatility witnessed in 2000," report authors said.
"Discussions among the major oil producers and consumer countries should be designed to improve the transparency, accuracy, and timeliness of data that guide the market. In turn, enhanced data quality and increased data transparency will improve market efficiency," the task force document said.
Accuracy sought in 1999
The issue of accurate oil market data was first in the news when oil prices were at record lows, causing instability in petrodollar-dependent economies and hurting US independent oil producers. Responding to independents' concerns over so-called "missing barrels" from world oil markets, Sen. Pete Domenici (R-NM) in 1999 enlisted the help of the General Accounting Office. GAO's June 1999 report found that IEA's monthly report needs to be more accurate when oil markets are adjusting to short-term, sudden events. IEA data also needs to be more transparent so that traders who react to the report could understand the limitations of the data. IEA pledged to revamp its system, and then-Sec. of Energy Bill Richardson quickly directed his department to propose an international oil transparency task force headed by IEA.
Two years later, it is reassuring that, despite a closely divided Congress and a new administration, efforts are still moving forward to make oil market data more reliable in the US and elsewhere.
Cooperation key
IEA has held several meetings with its member countries (including the US), to solve the problem. An April meeting in Thailand included six international organizations: Asia-Pacific Economic Cooperation program, European Union, Latin American Energy Organization, Organization of Petroleum Exporting Countries, and the United Nations. Member countries represented at the meeting included Algeria, Argentina, Brazil, China, Germany, Iran, Japan, South Korea, Malaysia, Mexico, the Netherlands, Nigeria, the Philippines, Russia, Saudi Arabia, South Africa, Thailand, the UK, and the US.
Industry involvement is currently being sought, with specialists invited to participate in roundtables that would lend industry experience to the transparency effort. Specific topics for the roundtables will be refinery gains and losses, stocks, conversion factors for oil, bunkers (marine and aviation), and trade balances. IEA is aiming to have meetings of small groups of industry experts every 2 months during 2001.
A major international forum on oil statistics may also be held within the year. In addition, IEA member countries are working to harmonize their data to include the same information on crude and petroleum products.
