Publications: Notes at the Margin

Could the Data Be Wrong? (May 4, 2015)


The recent movement of the WTI forward price curve is inconsistent with some market data and is not following the widely circulated forecasts. The significant decline in WTI contango in particular suggests the global inventory accumulation anticipated by forecasters with the International Energy Agency, the Energy Information Administration, Argus Media, and the Energy Intelligence Group, as well as many investment banks, is not occurring despite OPEC production increasing above the levels expected in almost all projections. At the same time, first-quarter gasoline demand growth was robust. At the same time, the Bakken/Brent crude price spread has shrunk to a level that destroys the economics of moving North Dakota crude to the US East Coast. These bits of information seem to point to an oil market that is turning quickly.


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