Policy Trudeau on Budgets, Refugees—and Trump
Bloomberg News Ottawa correspondent Josh Wingrove talked with Canadian Prime Minister Justin Trudeau about several issues, including his country’s economy and its role in the world. President Trump? My approach to politics is I work across all party line
data showing output that was as much as 10 percent higher than the data OPEC published for the Emirates based on tanker tracking.
Ultimately, the task of coming up with the most reliable production data falls to a small group of littleknown companies whose main job is to count the number of tankers leaving ports. The information produced by companies such as PetroLogistics, in Geneva, and U.k.-based Oil Movements influences the estimates of consultants, traders, and official bodies such as the IEA, which all pay for their research.
At their most sophisticated, these companies use data gathered from satellites to track tanker movement, a proxy for oil production. But satellite data must be supplemented by agents using simple binoculars to count and identify tankers leaving port. The trackers have to guess how much crude a vessel is carrying by gauging the tanker’s depth in the water. Measuring production becomes more complex when oil is moved via pipeline. Russia exports about 30 percent of its crude that way, according to official data. Independent groups often calculate volume by using infrared photography, which measures the heat thrown off by the flowing crude. The technique provides a rough approximation of output.
Petro-logistics calls its work “the art and science of tanker tracking,” with the aim of discovering what oil producers “are really doing as distinct to what they say they are doing,” according to its website.
These methods will determine how successful a freeze is. “If the Doha meeting is even the start of some agreement on baseline production numbers, then it may open the door to more cooperation in the coming months,” says Amrita Sen, chief oil analyst at consultants Energy Aspects in London.
It may also open the way for more confusion. Before a production cut, countries must agree on their baseline output. They often have an incentive to claim they pump more than they do to minimize the impact of any future curb. Agreeing to a baseline
number for production has often proved more difficult for OPEC than deciding the size of a possible cut. In 1999, Iran agreed to OPEC cuts only after Saudi Arabia accepted a baseline for Tehran of 3.6 million barrels a day, rather than 3.3 million. �Javier Blas
The bottom line Accurate data on oil production are essential if OPEC and NON-OPEC producers are to end the oil glut and restore prices.