Weekly US Crude Production Data Isn’t Real
Not all data is created equal and it’s important to differentiate between high- and low-signal quality data published by organizations like the US Energy Information Administration.
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Chart-makers love to use the EIA’s weekly US crude production data series, but this particular dataset is fraught with inherent limitations, which can be materially misleading as seen through much of 2023.
Specifically, an important piece of the beloved EIA weekly data, production, largely reflects a forecast rather than a surveyed observation and critically isn’t updated with more accurate historical estimates like we see in both the PSM and STEO.
The WPSR report should be used thoughtfully and narrowly, and shouldn’t, given all its “wonkiness”, influence your broader views about the market or the accuracy of the EIA’s far better monthly production reporting.
I don’t use weekly US crude production data.
It can be tempting to use the US Energy Information Administration’s (EIA) weekly production data given its relative timeliness. Chart-makers, like sell-side analysts and journalists, often love this data because of their inherent interest in making the intelligence feel immediately relevant (last week is basically real-time in oil data!). Not to mention the added bonus of greater volatility that can appear to contain more information.
Indeed, I don’t use the EIA’s weekly production data for any of my models or any of my charts—except for this note explaining why you also shouldn’t. In this note, I’ll explain how the EIA’s Weekly Petroleum Status Report (WPSR), Petroleum Supply Monthly (PSM) report, and the Short-Term Energy Outlook (STEO) are all connected in a way that will leave you better able to extract signal and avoid all-to-common analytical pitfalls.