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Editorial Dept

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Are Crude Inventories Falling Fast Enough?

Friday August 18, 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Shrinking ambitions for OPEC cut

(Click to enlarge)

- The IEA revised some of its projections for the oil market in its latest report, estimating that the global market will need much less OPEC supply than previously thought. The IEA said that it had previously overestimated demand from developing nations.

- That means that the market will need 400,000 bpd less from OPEC than previously thought.

- But a smaller “call on OPEC” does not mean that OPEC will produce less. The result will be a much narrower decline in global inventories in the third and fourth quarters, and an inventory build in 2018.

- On the flip side, the IEA upgraded its total global demand figure to 1.5 mb/d, up from 1.4 mb/d in its July estimate.

2. Inventories have moved back into the (radically different) five-year range

(Click to enlarge)

- The chief objective for OPEC with its production cuts is to bring inventories back to average levels. Specifically, back into the “five-year range.”

- Recently, they have made significant progress on that goal, with U.S. crude inventories dipping below the…




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