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The amount of oil in the world is a mystery

Scott Tong Jul 27, 2016
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Oil pumps in operation at an oil field near central Los Angeles. MARK RALSTON/AFP/Getty Images

The amount of oil in the world is a mystery

Scott Tong Jul 27, 2016
Oil pumps in operation at an oil field near central Los Angeles. MARK RALSTON/AFP/Getty Images
HTML EMBED:
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Later this week Shell and Exxon report earnings, and a big question is: Where will wobbly oil prices go next? It’s a matter of global demand and supply – as well as an important factor of how much oil is being stored around the world.

For more than a year, the world has been working off an oil glut. Now, some of that surplus has gone into storage caverns and containers around the world. That has helped keep crude prices soft. Exactly how much is in storage is a bit of a mystery.

“In the U.S. and in Europe, inventory data is quite good,” said oil market consultant Andrew Lipow in Houston. “However, if one were to look at Asia or Africa or South America, there’s a lot of missing pieces.”

There is no requirement that countries report storage data, and some nations as a matter of energy security keep that data private.

What’s also fuzzy: how much oil is stored on tanker ships. The International Energy Agency this month estimated floating storage is at a seven-year high. And for even better data, some energy firms have taken to granular counting measures: counting ships off the coasts of Singapore and Rotterdam, taking drone snapshots and measuring tanker water levels to assess how full ships are. The hunt for stored oil – and gasoline – is a bit of an energy “Where’s Waldo” caper.

Going forward, the question of energy storage will really matter when global demand starts to outrun supply. Demand is growing, and as large oil companies cut investments, some supply is eventually expected to fall off.

“You know, if you suddenly don’t have enough oil out there, knowing that it is, that storage is available in lots of places in the world, that really helps with energy security,” said Jamie Webster, nonresident fellow at the Columbia University Center on Global Energy Policy.

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