by Matthew R. Simmons
President
Simmons & Co. International

When the International Energy Agency's April 1999 Oil Market Report came out, the unaccounted-for crude needed to confirm the IEA's views of a massive oversupply of oil throughout 1997 and 1998 had ballooned to an astonishing 647 million barrels. Two months later, the IEA's June report still presumed that 510 million barrels of oil were "missing," and the IEA had officially opined that the entire quantity resided in the untracked storage facilities in the developing countries of the world.

Do Missing Barrels Even Matter?

Since so many industry observers have casually shrugged off the missing barrel issue throughout this saga, does it even matter whether these barrels exist or not? It matters a lot. If they exist, it will take up to a year or more to correct the overhang, while, as a mere illusion, they are inconsequential. So, are these barrels hiding somewhere?

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