IEA working to improve its global oil inventory data reporting system
Maureen Lorenzetti
OGJ Online
WASHINGTON, DC, Oct. 26 -- The International Energy Agency plans to unveil a more comprehensive and timely world oil data reporting system next year that that should help reduce market volatility.
IEA Executive Director Robert Priddle told the Center for Strategic and International Studies on Friday the agency is "half way through" the overhaul. Commodity traders use IEA data to calculate international supply and demand.
In 1999, US policymakers and independent producers said IEA needed to revamp its monthly report to reflect an increasingly volatile world oil market. They said IEA was not reacting fast enough with relevant data to help markets adjust to short-term, sudden events.
And the critics said IEA data also needed to be more transparent so that traders could understand the limitations of the data.
IEA pledged to revamp its system and has held several meetings with member countries, including the US (OGJ Online, May 25, 2001). Priddle told CSIS another meeting with members will be held in Riyadh this November. Industry involvement has also been sought.
Priddle said IEA has been very successful with attempts to harmonize data collection among Organization for Economic Cooperation and Development nations but the response from non-OECD countries is still "mixed."
Energy analysts who attended the CSIS discussion were encouraged by Priddle's commitment to improve IEA data. Analysts argue that traders, whose job it is to speculate on the price of oil and gas, need more timely and accurate information to get a clearer picture of market fundamentals. Without accurate data, traders too often overreact to incomplete or inaccurate information. The result is damaging short-term price swings that hurt oil company stock values and discourage investment.
Analysts at the CSIS meeting also said the US Energy Information Administration should improve its inventory data collection.
They expect EIA to take over the American Gas Association's weekly gas storage report and said other groups, including the American Petroleum Institute may also step in (OGJ Online, Oct. 12, 2001).
Priddle cautioned governments to avoid the political temptation to try to manipulate the market. He singled out for criticism a European Union green paper that advocating using oil stockpiles on a regular instead of emergency basis to dampen oil prices.
"You should be very careful when you are considering a drawdown," he said. "It's not the business of IEA to anticipate the market" on a regular basis and "I don't think it would be credible."
At the same time, Priddle said there always is a "gray area" where intervention is necessary. Given the volatile nature of oil markets, some politicians in the US and elsewhere have advocating releasing government oil when prices are high even if there is no physical supply shortage.
Priddle declined to offer details under what scenario IEA would consider an emergency oil stock drawdown, although he said the agency has "updated" its plans in light of the conflict in Afganistan.
Contact Maureen Lorenzetti at [email protected]
