EIA Makes too many errors The US EIA’s crude accounting issue hasn’t gone away, despite changeThe primary data source on U.S. energy markets has struggled this year to depict weekly changes in the country’s oil supply and demand, leaving some investors conflicted on how to parse information about the world’s top oil producer and consumer.
For decades the market had brushed over a so-called “adjustment” in the EIA’s weekly inventory report due to its relatively negligible size. But that has changed in the past year as the agency consistently posted outsized adjustments, also known as unaccounted for barrels, sowing confusion among market participants despite changes to improve the quality of the data.
WHAT IS THE ADJUSTMENT NUMBER?
The adjustment number is a figure the EIA reports each week that serves as a balancing item when the administration’s supply and demand data do not align. Adjustments are normal within the data, which, given the report’s quick weekly turnaround, have to account for some margin of error.
However, market participants have consistently complained this year about larger adjustment figures. The EIA posted an adjustment number of minus 1.42 million barrels per day (bpd) in the week to Dec. 1, the largest negative adjustment on record. In the week to Dec. 8, the adjustment was minus 1.05 million bpd, the third largest negative adjustment on record.s