The crude oil aspects of the data were most interesting this week.
C+C production is up very modestly, +0.1 to 12.2 mbpd, materially unchanged since April
Commercial crude inventories have soared since the start of the year, adding 30 mb in just the last two weeks.
The collapse of refining, the source of demand for crude, is the key factor. Refining has been down 2.8 mbpd on average over the last three weeks. With refinery output down, crude inventories accumulate, given that crude imports have remained range-bound
Our incentive to store analysis also suggests quite soft balances, that is, our analysis is showing an explicit incentive to build crude oil inventory, and that’s exactly what we are seeing in the data. This incentive will be similar around the globe.
Draws from the Strategic Petroleum Reserve appear to have ended, with crude SPR inventory stabilizing around 370 mb versus a neutral value of 640 mb. This may well prove a problem going forward.
Refined product demand remains range-bound, still off 2019 levels by 3-7%, off by 11% in the case of jet fuel.