Opec’s biggest problem is that in its tug of war with US shale no one really knows for certain which is winning.
The oil cartel last year appeared to capture a major victory by corralling some of the world’s biggest producers to join it in cutting output to finally end a near three-year-old oil glut.
But four months on, despite trumpeting figures suggesting the group has adhered more rigidly to its cuts than ever before, the crude price is still stuck near $50 a barrel.
The issue for the cartel is not just one of a resurgent shale industry propelling US crude inventories to record levels, but an information asymmetry that gives the US an outsized importance to traders beyond its status as the world’s largest oil consumer.
The US is the only country where close to real-time information is freely available on the state of oil inventories, due to the government’s decision to fund the Energy Information Administration after the first Arab oil embargo of the 1970s.
Weekly and monthly reports published by the EIA have for years been a lodestar for traders navigating an otherwise opaque market.
But as surging US production has made the country less reliant on oil imports — and fast-expanding emerging markets such as China and India become the dominant centres of oil demand growth — the focus on the gold standard data of the US may mask the reality of what is happening to the oil market beyond its shores.
US stockpiles may be rising as supplies there grow, with cheap and abundant land-based storage also luring international customers. Elsewhere the market is starting to tighten, many traders believe.
Now, short of every major oil importer outside the US deciding they have the money to fund an EIA equivalent, from cash-strapped European nations to transparency phobic states in Asia, the issue is not easily resolved.
Big oil traders, always quick to try to sniff out a possible information advantage over rivals, have turned to companies and in-house teams who utilise satellite technology to try to colour in the global picture.
In recent years, the advent of widely available satellite tracking for commercial vessels has given a more global view of oil flows, with the Automatic Identification System, or AIS — first introduced to try to avoid collisions at sea — unmasking the movements of oil tankers in the 98m-barrel-a-day market.
This has also allowed the large-scale collection of data that a growing number of tanker tracking companies say will allow them not just to track where oil is going, but to forecast how shipments are likely to evolve with algorithms and machine learning.
Such companies say the business still requires a human element to sift and understand the numbers, but stories of staff toting binoculars in Opec member ports have largely been consigned to history.
This broader view of global supplies, for traders prepared to invest or pay for it, is raising questions for the market.
Data made available to the FT by one new tanker tracking start-up this week suggest the brimming supplies in the US market may not be representative of the rest of the world, with seaborne shipments of crude down at least 16 per cent so far this year.
That is hard to square with a market behaving as if supplies are still buoyant globally. The International Energy Agency, Opec and the EIA all forecast minimal supply growth outside of the US in 2017.
Unofficial data will still, however, struggle to carry the same clout as weekly numbers from the US that the market has relied on for years. Prices weakened slightly on Wednesday after the EIA reported another build in US crude stocks.
Opec members may now be attempting to respond to the US’s heightened visibility and influence.
Saudi Arabia this week raised its official selling prices to the US for next month, while cutting them to every other region, in a move that may slow their exports to one of their oldest customers and allies.
Riyadh appears to have realised they need to target US inventories to convince the world they are winning, even if unofficial data suggests they are already enjoying some early successes elsewhere.
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