Publications: Notes at the Margin

Economic Cost of Bad Data (July 18, 2016)


The Energy Information Administration's overestimation of growth in US gasoline consumption is about to exact a terrible cost on refiners and crude producers. As we explained in our July 11 report, the EIA makes two mistakes in its calculation. First, it underestimates exports by two hundred thousand barrels per day. Second, it does not revise previously published information when new and better data become available. Unfortunately, refiners, crude producers, traders, and speculators are set to become the victims of the EIA's outdated procedures. Gasoline prices will drop sharply soon, taking crude with them. The EIA should be blamed for the resulting billions in losses.


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