Oil has been a hot commodity ever since the world began to recognize its wide array of purposes.
The Wall Street Journal took a comprehensive analysis of how oil reserves by country have affected global prices and the worldwide market. The U.S., for example, has taken initiative in piling up inventories as prices have reached historic lows.
The country is one of several nations willing to disclose how much it stores, whether in an above ground storage tank or a transmission pipeline. However, many others such as China and Russia have remained mum on their own storage figures, leading to a convoluted set of industry data that has been considered by industry experts to be inaccurate.
This has sparked a bit of uneasiness in the sector, as an increasing amount of oil is being kept in countries where data is unreliable.
Barrels and Tanks
Despite the intricacy of gathering information on crude-oil inventories, available data from the CEIC, IEA, and the Energy Intelligence Group showed that more than 1.5 billion barrels represented the world’s inventories as of April 2016.
Developed countries used to be at the forefront of oil storage, but emerging economies have recently displayed a huge appetite not just in oil storage, but also in consumption as well. This has led inventory tracking to become more complex.
Take Singapore as an example. Analysts are confused as to how much oil the city-state stores in its waterways. For such as small country, it was able to cause experts to speculate on the amount of anchored crude oil in the Lion City.
The issue of oversupply serves as one reason why some are concerned oil prices. If there’s so much oil and yet demand is weak, the commodity then becomes cheaper. In the U.S., a weaker currency also affects dollar-denominated oil prices since foreign buyers will be able to buy more crude at a lower cost.
Unless the global market finds a way to improve their transparency in reporting oil reserves, the market will remain vulnerable to volatility and unstable prices.