Here’s a bar bet you energy investors can use: Hey, how much if any is the world under-supplied oil right now?
The answer, says one highly respected voice, would surprise you: They say the global oil market is currently undersupplied by 2 million barrels per day. That’s a very bullish statement, and a bit out of consensus right now.
Core Labs – Access To Better Data Than Most
The problem with making oil price predictions is—getting reliable supply and demand data is next to impossible.
There are concerns about some of the data from the IEA in Paris, the EIA in Washington, and OPEC.
On the supply side of things there are few people who should have better data than Core Labs (CLB-NYSE). Core Labs are the global leaders in understanding reservoir performance. With offices in 50 different countries Core Lab has a client list that includes oil and gas majors, national and independent oil companies.
On a daily basis the company gets real time production data from producing basins across the globe. They can actually see what production is doing in real-time.
Much of this data comes from Core’s “Joint Industry” project which involves global E&P producers agreeing to provide data on their reservoir performance with Core.
The appeal to the producers that contribute the data is that having Core Labs study accumulated data across the industry allows Core to come up with better reservoir solutions for everyone.
In addition to having access to data most others don’t, CLB’s past predictions provide some further reason to believe what they are saying. In the company’s second quarter 2015 conference call Core indicated that it expected 2016 U.S. production fall by at least half a million barrels per day.
According to EIA data, U.S. production did exactly that.
In their just completed conference call, Core Labs revealed that they in fact do believe that the global oil market is indeed undersupplied by 2 million barrels per day.
