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Oil Mystery: How IEA Lost Track of 800,000 Barrels a Day...for One Year

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A crude mystery is unfolding as the International Energy Agency (IEA) has lost track of 800,000 barrels of oil a day in 2015, it has emerged.

The IEA — which constantly monitors data on oil production and trade — reported that the whereabouts of an incredibly large amount of barrels from lasy year is unknown. The last time a similar quantity went missing was 17 years ago, in 1998. 

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To sum it up: last year the IEA calculated that about 1.9 million more barrels of crude oil were pumped out on a daily basis than there was demand for. Of those, 770,000 barrels are known to have ended up in onshore storage, while 300,000 ended in pipelines.

The remaining 800,000 barrels are nowhere to be found: it is not yet clear who bought them or even if they existed at all. To make things worse, in the last three months of 2015, the number of missing barrels reached 1.1 million per day, or 43% of the estimated oversupply.

Data Error?

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The incident came to light at a time when oil prices worldwide have been falling at a historic low under the pressure from a whopping production glut in the Gulf countries. Indeed, someone is pointing at the incident as evidence that the glut is not actually happening, or that it could have been grossly overestimated. Following this reasoning, the barrels did not exist at all and the mystery is just the result of shoddy data processing.

The US Government Accountability Office, an independent agency aiding the American Congress, examined the data and found that:

"…[statistical] limitations can introduce errors into the data, although the magnitude and direction of these errors are not clear."

China Stockpiling?

Another possible explanation is that the barrels could be in China.. The IEA's website says that unaccounted barrels could be explained by an underestimation of oil demand or stockpiling trends in countries outside the Organization for Economic Co-operation and Development (notably, China). 

This sounds strange to many experts, as it would imply that China and other non-OECD countries are stockpiling oil at a much higher rate than OECD ones, and it is not clear why.

The only thing that is clear so far, is that keeping tabs on the quantity of oil is a tricky task, and even without the missing barrels — the current oil overproduction is having a significant impact.

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