(Refiles to fix slug. The opinions expressed here are those of
the author, a columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia May 22 One of the
difficulties in constructing a narrative for the crude oil
market and the output cuts promised by major exporters is what
set of numbers to believe.
It's possible to argue that Saudi Arabia, OPEC's biggest
exporter and the force behind the cuts, is either doing more
than its share, or less, depending on the numbers used.
The export data published by the Joint Oil Data Initiative
(JODI) on May 18 would support the view that the Saudis have
more than met their commitment to the November deal between the
Organization of the Petroleum Exporting Countries (OPEC) and
allied producers to cut output by a combined 1.8 million barrels
per day (bpd).
The JODI numbers show the Saudis exported 7.23 million bpd
in March, slightly up from February's 6.96 million bpd, and down
from January's 7.71 million bpd.
In the first quarter, JODI data puts Saudi exports at an
average 7.3 million bpd, or 670,000 bpd down from the 7.97
million bpd reported for the last quarter of last year.
This would imply Saudi Arabia's crude exports have fallen by
quite a bit more than their commitment to cut 400,000 bpd from
output under the Nov. 30 deal.
Vessel-tracking and port data compiled by Thomson Reuters
Supply Chain and Commodity Forecasts, however, tells a different
story. This data shows Saudi exports of crude averaged 7.67
million bpd in the first quarter, down only 180,000 bpd from the
7.85 million bpd in the last quarter of 2016.
The above tracking and port figures were obtained by
filtering the data to show vessels that have been discharged,
are in the process of discharging, or are underway.
It's interesting to note that the vessel-tracking data for
the fourth quarter of 2016 shows Saudi exports actually lower
than what the JODI numbers state, by some 120,000 bpd.
The shipping data, however, also shows exports in the first
quarter of 2017 were 370,000 bpd higher than what JODI reports.
A small discrepancy could be ascribed to differences in
assessing how much oil was aboard each vessel, but 370,000 bpd
is a large gap, equivalent to about five very large crude
carriers (VLCCs) a month.
The JODI data is based on self-reporting. The Saudis, along
with the other countries that participate in the venture,
provide the numbers themselves, and these are then collated and
The tanker-tracking figures rely on International Maritime
Organization (IMO) data provided by individual ships, as well as
by collating port and other reports.
WHAT TO BELIEVE?
The discrepancy between the two data sets can colour one's
view of the state of the crude oil market.
If you believe the JODI numbers, a reasonable conclusion
would be that the Saudis are contributing more than they said
they would in November to tightening the global supply-demand
balance for crude oil.
If you trust the vessel-tracking data more, your conclusion
most likely would be that Saudi exports have been cut, but not
by as much as the 400,000 bpd they promised to trim from output.
Another factor worth taking into account is the level of
Saudi exports of refined products.
The JODI data shows refined product exports of 1.4 million
bpd in March, down from February's 1.52 million bpd, but up from
January's 1.15 million bpd.
For the first quarter the average product exports were 1.36
million bpd, up about 90,000 bpd on the 1.27 million bpd for the
fourth quarter of 2016.
The market tends to ignore product exports, but does it
really matter in what form Saudi oil reaches the market, crude
or refined products?
This may well be an issue that determines margins for
refiners, particularly in Asia, destination of about two-thirds
of Saudi crude exports and much of its product shipments.
But if the Saudis are increasing product exports, which JODI
data says they are, should this be taken into account when
assessing their overall level of exports?
Ultimately, the best indicator of a tightening market is the
level of global inventories of both crude and products, but once
again data here is limited and incomplete.
While there is reliable data for industrialised nations -
showing stocks haven't drawn down in any meaningful way since
the start of OPEC's and its allies' output cuts in January -
there are at best only partial numbers for inventories in the
Overall, what the data does tell you is that it's difficult
to know exactly what is going on.
The only thing the JODI and vessel-tracking numbers do agree
on is that Saudi crude exports were lower in the first quarter
of this year than they were in the last three months of 2016.
What they disagree on is the extent of reduction, and that,
unfortunately, is exactly what would help market participants
judge just how quickly the crude oil market is re-balancing.
One thing is certain, the tanker data is far more timely
than JODI figures.
It shows Saudi exports at 7.2 million bpd in April, and at
7.1 million for the first 21 days of May, although this figure
may change by the end of the month.
The tanker data confirms a trend of lower Saudi exports, and
suggests an acceleration in April and so far in May.
(Editing by Tom Hogue)