Earlier than continuing with this publish, please instantly learn the unique supply for the complete context for the graphs, which I will even reproduce right here for comfort. The creator is Rory Johnston and I extremely suggest following his Substack and Twitter for some business insights.
Right here is the complete album of graphs.
Graph 1 exhibits how inventories deviate from their common. Decomposing them into crude and refined present the principle drawback is within the crude sector.
Graph 2 breaks down the drawdowns into segments. You possibly can see crude and distillates are huge drivers (diesel, jet gas, and fuel oil), whereas gasoline is generally wonderful. Graph 3 separates into completely different graphs the inventories. Discover how gasoline is definitely on the uptrend. Each Graph 1 and Graph 2 present simply how steep the drawdowns are, which is why at present’s oil provide disaster is so noticeable.
The final a part of Johnston’s publish is on a peculiar development in S. Arabia: Graph 4 exhibits that even throughout Covid’s trough in oil demand and ever since, oil inventories have been on a gradual decline. The Saudis have determined to not maintain onto as a lot stock, and that is completely different from the stock drawdowns elsewhere on the planet.
This was an especially transient abstract of the article, and I counsel instantly studying his article, not my highlights.
What is the takeaway? It is not too late to get into some components of the oil market, particularly these most severely affected by the drawdowns at the moment. These graphs counsel that the retail gasoline market is already beginning to settle down, however clearly the crude/distillate markets have little aid in sight.
