The Billion Barrel Oil Swindle: 80% Of U.S. Oil Reserves Are Unaccounted-For

Written on October 11th, 2016 in politics Comments Off

Published on naked capitalism, by Arthur Berman / Yves Smith, Oct 10, 2016.

By Arthur Berman, a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and is currently consulting for several E&P companies and capital groups in the energy sector. Berman is an associate editor of the American Association of Petroleum Geologists Bulletin, and was a managing editor and frequent contributor to The Oil Drum.com (website).

He is a Director of the Association for the Study of Peak Oil, and has served on the boards of directors of The Houston Geological Society and The Society of Independent Professional Earth Scientists. Originally published at OilPrice

U.S. crude oil storage is filling up with unaccounted-for oil. There is a lot more oil in storage than the amount that can be accounted for by domestic production and imports.

That’s a big problem since oil prices move up or down based on the U.S. crude oil storage report. Oil stocks in inventory represent surplus supply. Increasing or decreasing inventory levels generally push prices lower or higher because they indicate trends toward longer term over-supply or under-supply.

Why Inventories Matter: … //

… Understanding U.S. Stock Levels: … //
… Stock Change = Domestic Production + Net Imports – Crude Oil Input to Refineries: … //
… All Together Now: … //
… When You Have Eliminated The Impossible: … //

… It would be speculation to blame anyone for this apparent statistical disaster. Nevertheless, there is a problem that has major implications for oil price and the reliability of reported data.

In several of his Sherlock Holmes mystery stories, Arthur Conan-Doyle wrote, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”

We have not eliminated any impossible explanations. We have, however, eliminated the three most improbable explanations for unaccounted-for oil.

The truth—however improbable—is that inventories are probably much lower than what is reported.

(full long text, 8 graphs),

Links:

LIVE UPDATE – Putin: Russia, Turkey call for urgent end to bloodshed in Syria, incl video, 22.00 min on RT RUPTLY LIVE, Oct 10, 2016/10.18 MEZ;

China supports Russian position on Syria & Afghanistan – Beijing, on RT, Oct 10, 2016;

Russia is killing ISIS, Trump disagrees with VP over more intervention in Syria, on RT, Oct 10, 2016;

Putin & Erdogan to talk restoring trade, Turkish Stream, Syria cooperation in Istanbul, on RT, Oct 10, 2016;

China’s Influence on World Stage, on Dissident Voice, by Kim Petersen, Part 3 of 3: What Does the Rise of China Mean for the Rest of the World? Oct 9, 2016;

The Great Russia-China South China Sea Naval Hook Up (and Why It Matters), on National Interest.org, by Huiyun Feng, Oct 7, 2016;

Sheikh Up: Qatari Investors Eyeing Control of Deutsche Bank, on Spiegel Online International, by Martin Hesse and Christian Reiermann, Oct 7, 2016 (Photo Gallery): Strategic errors, massive fines and attacks by speculators have created a major crisis for Germany’s most important bank. Now, investors from Qatar, who already own some 10 percent of Deutsche Bank, are considering taking control;

The Hate Factory: When Free Speech and German Law Collide on Facebook, on Spiegel Online International, by Jan Fleischhauer, Oct 6, 2016 (Photo Gallery): American authorities are fining companies like Volkswagen and Deutsche Bank billions of dollars for violating the law. In Germany, though, where Facebook is allowing mass violations of hate speech legislation, the government is letting the social media platform get away scot-free;

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