Commodity Corner
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Never believe the oil forecasters
If there is one thing OPEC Secretary General Abdullah al-Badri would really like to get rid of, it’s analysts forecasts of how much oil there is sitting in storage in the world’s biggest energy consumer the United States.
“The forecasts are always wrong,” he has told Reuters. “Why do you carry on running them?”
He might have taken this week as a particularly fine example of how difficult it is to get it right.
Analysts polled by Reuters thought crude oil stocks would rise by 1.4 million barrels in the latest week. Instead, according to reports from the American Petroleum Institute and the Energy Information Administration, inventories fell, sending oil prices back up towards $81 a barrel on Wednesday.
No-one was heard complaining on the oil market, however. Instead, everyone there was busy trading on the surprise — or in the view of the OPEC Secretary General driving the kind of speculation that needs to be kept firmly under control.
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[...] Never believe the oil forecasters (Reuters) [...]
A good idea can be that these forecasts are created just to offer some trading opportunity to the oil news traders. But the report itself (especially with 4 million barrels drops/rises)can be a good trigger event for trading, without the forecasts.
Anyway, the bad forecasts are still useful – the average difference between the forecast and the actual values tells something about the general state of the oil market, in my opinion.