Excess crude inventories, as measured by seasonally-adjusted days of turnover, have been rising, up 4 mb to 22 mb
Product inventories on a seasonally adjusted days of turnover basis fell 5 to -11 mb
Crude and key product inventories, taken together, are down marginally to +9 mb.
SPR draws continue at 208 kbpd this past week.
Except jet fuel, demand remains range-bound
Gasoline demand is 3.3% below normal
Distillate had a bad week, but primarily due to base year effects
Jet fuel has its best week since the start of the pandemic, down only 3.4% below normal after averaging 10% below normal since the start of the year
US crude and condensate production has been bouncing around in the low 12s, 12.4 mbpd this past week, supporting the notion that US oil production has peaked
Oil prices remain range-bound, as they have since the beginning of May
WTI stands around $72 with Brent at $77, in fact their average price over the last twelve weeks
Our Incentive to Store analysis suggests that the market anticipates normal balances for the rest of the year, essentially a business-as-normal scenario, notwithstanding mooted Saudi production cuts
Finally, it is hard to avoid the impression that the Ukraine war has adversely affected US oil consumption.
Gasoline consumption is about 4% lower than immediately prior to the war
Distillate consumption is off more than 10% compared to the pre-war period.