Oil fields operate in a complex market. This market changes instantaneously in response to global events, new technology, or a shift in the government’s policy on energy. Oil production reports help you monitor the impact of these changes on the supply side of the oil market. More specifically, you will take note of output levels, imports, exports, inventories, and movements among other things. Doing so is critical for various reasons. Here are the top 5 reasons to track oil production reports.
1. Providing Clarity on Market Conditions
Sometimes, the oil market is awash with rumors and endless speculations. Experts in the industry may give varying opinions as well especially when a significant event takes place locally or abroad. These conflicting statements create uncertainty in the market. Consequently, producers in oil fields become unsure of what they should do. Daily oil reports lift this uncertainty by giving them a realistic picture of the market as it reacts to a significant event. These figures help them manage their assets effectively in addition to scaling their operations appropriately.
2. Making Informed Decisions
Daily reports on oil production facilitate the judicious allocation of resources in an oil company. For example, what is the correct response to a spike in national output because of a new extraction method? In this case, pumping additional funds into Research and Development is the best recourse. Doing so would help you find ways of implementing the new technique in your oil field. Finding a better method than the recently discovered one is also possible. Investing in equipment or staff is another excellent idea if your production levels are falling behind the national or regional average.
3. Learning New Things about Oil Production
These reports contain information on production techniques. For example, did scientists discover another extraction method? Is this method responsible for a sharp increase in the production of oil? Is it a sustainable technique? What is its overall impact on the oil industry? You will receive the answers to many of these questions in your Greasebook Reports. Similarly, you will learn many things about operational performance including the impact of specific managerial practices on output. You will also see the effect of government policies on production.
4. Identifying Opportunities and Risks
Businesses expand when they explore opportunities that are open to them. Knowing where these opportunities exist is impossible without periodic reports on market conditions. In contrast, you can spot them quickly if you read regular updates that focus on the industry. For example, an emerging trend of diminishing output in a particular region means that preparations for increased demand are necessary. Conversely, preparing for a drop in oil prices is an excellent idea if oil companies are increasing their production levels alarmingly.
5. The Buildup of Statistical Data
Daily productions reports give you an idea of what is happening in the oil fields on a particular day. You can develop historical records of what happens every day for a couple of years. Then you can use these records to ascertain certain trends in the market. Doing so would help you notice anomalies in a particular region on a specific day, week, or month. You can seek explanations for these anomalies once you see them. You can also take note of outliers in the levels of inventories, exports, or imports at certain times and in specific regions.