We know what’s coming and we are prepared.
🇺🇸🛢 The most visible oil inventories are about to plummet
Several things need to be noted first before looking at tanker data:
We are still offloading some of the tankers inbound laden with crude. These are temporarily keeping US crude imports elevated. The same VLCCs discharging crude turn into export volumes in 1-2 weeks.
We have an armada of empty VLCCs headed for the US, which will drain US commercial crude inventories dry.
All the while, we will continue to drain product inventories in the US. Petroleum product exports are expected to remain near all-time highs.
The snapshot above is our preliminary US crude storage estimate for next week, which includes 7.1 million bbls from the SPR. The final SPR release figure could be higher next Monday, so we will have finalized estimates out by then.
What’s not shown above is what happens to US commercial crude storage when 1) US refinery throughput ramps up to 16.8 to 17 million b/d and 2) US crude imports fall to 5.5 million b/d due to lower inbound crude flows.
The net impact on US commercial crude inventories by the middle of May is as high as 12 million bbls.
In essence, there could be EIA oil storage reports showing -10 to -12 million bbls of crude WITH a SPR release of 10 million bbls. This would put the cumulative crude draw at 20 to 22 million bbls.
And since I’m a numbers guy, let’s just say this. Since EIA started publishing the weekly oil data in 1982, there have been 41 weekly crude draws of over 10 million bbls. The largest ever recorded crude draw (commercial + SPR) was on the week of July 28, 2023, and this week’s EIA oil storage report (-13.355 million bbls) already ranks as the 6th largest crude draw in history.
I guess we are really doing this. We are really going to just watch the Strait of Hormuz stay closed, and onshore oil inventories plummet. US product storage is already approaching seasonal lows for this time of year, and the next few weeks will push us into brand-new territory.
I still see commentary about comparisons to 2022. The absurdity of those comments fails to recognize that this is not even remotely similar.
China is now closing mosques and converting them into barns for raising chickens as a way to fight radicalism. China officially considers Islam a ‘mental illness.’ Do you like this idea?
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🛢📈 — Reuters reports that oil is approaching $100 per barrel following the latest exchange of attacks between Americans and Iranians on oil tankers.
▶️The price of Brent crude has risen to $97.07 per barrel, while American WTI crude has risen to $92.28. In the past week, Brent has risen by 7.8%, while WTI has risen by nearly 10%.
▶️On Saturday, U.S. forces attacked three Iranian oil tankers, one of which was stationed near the island of Kharg, a key center for Iranian oil exports. In response, the Islamic Revolutionary Guard Corps announced attacks on three oil tankers in the Strait of Hormuz and three more U.S. ships.
▶️In this context, traffic through the Strait of Hormuz has sharply declined. Over the past 10 days, an average of only 10 cargo ships have transited the strait per day – the lowest level since May.
The WHO now states on its website:
Vaccination against COVID-19 can trigger multiple sclerosis through cross-reactive CD4+-T cells that recognize the spike protein of SARS-CoV-2 and myelin peptides.
In other words: Your own immune system destroys the nerve pathways and then attacks your brain and spinal cord.
