(Repeats Dec. 14 story with no changes)
By Alex Lawler
LONDON Dec 14 OPEC's first supply cut deal in
eight years came as good news for a Swiss family business
founded by an economics analyst who once helped the then
Rhodesian government procure oil supplies in the face of
Geneva-based Petro-Logistics earns money from the lack of
timely and complete information from OPEC members and other oil
exporters like Russia in the 95 million barrels-per-day global
market, by tracking shipments to estimate production and supply.
The Organization of the Petroleum Exporting Countries is
planning to cut its output by 1.2 million bpd from Jan. 1, its
first such deal since 2008. Russia and other non-members are
planning to cut about half as much.
The deal will heighten interest in assessments of OPEC
production, to see the extent to which it makes good on the
cutbacks. As well as Petro-Logistics, other consultants,
government bodies and news services estimate OPEC output.
Oil prices jumped to $57.89 a barrel, their highest since
July 2015, on Dec. 12, supported by the prospect of lower
supply. Estimates of OPEC and Russian compliance in 2017 will
likely lead to more price volatility.
Since the early days of Petro-Logistics which was founded in
1980, and since the last OPEC cut of 2008, more data has become
available, such as satellite information on tanker positions,
helping to make the oil market more transparent.
While this helps, piecing together the whole picture such as
what type of crude is on the tanker and who is buying it remains
no easy task, Petro-Logistics' chief executive Daniel Gerber,
who began with the firm in 2009, told Reuters.
"When I started at Petro-Logistics, we were still using
Lloyds List Voyage Records, which were monthly publication
hardbound books providing you with a handful of tanker positions
in any one update," he said.
"While there is some information that is easier to get, such
as satellite data on ship positions, the whole story is harder
to put together in terms of things like grades, customers,
refining activity, in-country demand and field-by-field
production, making the element of human experience even more
important than in the past."
Petro-Logistics estimates OPEC managed to achieve about 60
to 70 percent of the pledged reductions last time around in
2008-2009, and expects a similar level with the new initiative.
"This time we expect the core OPEC - Saudi, UAE and Kuwait -
to largely stick to their commitments, which alone should result
in about 50 percent cut compliance. With a bit of help from the
other members, we should see 60-70 percent compliance once
Libya and Nigeria - exempt from the cut - are wild cards, as
is Russia. "Russia doesn't have the best history of joining OPEC
cuts, they are another big wild card."
Since OPEC accounts for the bulk of the world's oil exports,
its level of production is vital information for traders,
consumers and governments.
The trouble is, finding that number is not easy due to a
dearth of timely official information. Even OPEC itself issues
two sets of figures - those provided by members and independent
estimates - which show significant differences about the level
of, say, Saudi or Iraqi output.
Petro-Logistics was founded by Conrad Gerber, Daniel's
father, after he had spent 13 years working for the Rhodesian
government, "countering sanctions and defying an apparently
hostile world," as his son put it.
"My father received a challenge from an oil trader to
perfect a new discipline in oil market analysis - the art and
science of tanker tracking," Gerber said.
"He was willing to do the hard work. That meant a lot of
travel to some pretty interesting places, setting up structures
to bring all the information together, and the crucial part, the
experienced human element."
The Petro-Logistics OPEC estimates originally relied on
Gerber senior's vast network of contacts. Sent out to clients
under the heading "CONFIDENTIAL," the numbers sometimes made
their way onto news wires, moving the price of oil.
This gave rise to an oil-market myth that Petro-Logistics
had people stationed at ports around the world with binoculars,
counting tankers as they left with crude, although this was
"just people trying to make sense of how my father got access to
such good information," Gerber said.
Daniel and his brother, Mark, now manage the company
following their father's death in 2009. It has 15 staff, of
which 10 are full time. Three are based in a Houston office.
Petro-Logistics' clients have included most of the main
types of participant in the oil market - oil majors, trading
houses, banks, hedge funds, national oil companies - and even
other OPEC members themselves.
"Back in the 80s in particular and still today, OPEC members
didn't trust each other and they were very keen to understand
what other members were doing, if they were sticking to their
quota agreements," Gerber said.
While it was a myth about the binoculars, and technology now
allows real-time tanker tracking, the company does collate
information from a source network accumulated over decades.
"In reality, knowing what tankers are arriving and leaving a
port is the easiest part of the equation," Gerber said. "Knowing
what is on board is far more complex and requires contacts on
(Editing by David Evans)