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The Pace of Change in Crude Oil Storage is Starting to Look Supportive

Minneapolis, MN | August 15, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC


Global storage is down >16mm bbls through the end of July, and outside of China like the start of a trend.


Three Things

  1. An enormous weekly drop in commercial crude inventories grabbed the market’s attention and dropped the withdrawal pace to its highest point since April. Not coincidentally, prompt WTI is trading on par, as well.

  2. The global picture lacks the weekly excitement but looks like it is on a similar, albeit slower, pace. China stands out, having recently accounted for 70% of the MoM change in Asian onshore storage.

  3. Through the end of July, total diesel storage in the US looks like it is keeping pace with 2022, setting up the balance of the year.

US Crude Oil Inventory


The reported 17mm bbl draw from commercial inventories drops total commercial inventory to ~439mm bbls, just about matching the first report of the year. This one report offset the last three weeks’ worth of reports and expanded the pace of withdrawals from approximately flat to >3 mm bbls per week. As we’ve noted, acceleration has been a good indicator of whether oil prices would rally over the last two years, and that has continued to be the case. Except for the period in late June when refinery inputs dipped by 500kbd and exports dropped by half, the pace of withdrawal has been steadily increasing and, alongside it, prompt WTI.


*This summary is based off August 6, 2023


A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


 

Meet the Author!


Phone: +1-832-413-3124


Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.


He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.


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