Thursday, August 16, 2007

OECD fails IEA reliability test

Taken from

To correct for earlier over-optimistic forecasts, the International Energy Agency (IEA) has reduced its estimates for non-OPEC oil production by 410 kb/d from second quarter 2007 onwards. This change has been little noticed in the press.

According to the July 13 issue of the IEA's Oil Market Report, the original non-OPEC forecasts for 2005 and 2006 proved over-optimistic to the tune of 1.0 mb/d. This discrepancy is mostly due to decreasing OECD production. Moreover, OECD supply has consistently come in below initial forecasts for the past ten years.

This has forced the IEA to introduce what is called a "reliability adjustment", reducing their total non-OPEC forecasts with 410 kb/d, applied from second quarter 2007 onwards.

IEA relies on national forecasts, so who are the culprits? The country-by-country adjustments are as follows (sorted by amount):

Norway -162 kb/d
USA -125 kb/d
UK -125 kb/d
Canada -97 kb/d
Brazil -34 kb/d
Malaysia -34 kb/d
Other OECD Europe -24 kb/d
Egypt -24 kb/d
Colombia +20 kb/d
Australia +22 kb/d
Kazakhstan +25 kb/d
Azerbaijan +26 kb/d
Mexico +27 kb/d
China +97 kb/d

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