Unrefined stocks in industrial storage and the strategic petroleum reserve have fallen by 13 million barrels because the start of July, after increasing by 106 million considering that mid-March. Stocks swelled from 60 million barrels below the prior five-year average at the end of February to 65 million barrels above it by the middle of this month. Crude imports from Saudi Arabia skyrocketed to as much as 11 million barrels per week, from an average of less than 3 million barrels a week over the previous year.
LONDON (Reuters) – Bloated U.S. crude stocks are finally on a diet, after the rise of imports from Saudi Arabia, packed at the height of the volume war with Russia in March and April, completed discharging in the middle of July. The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial picture over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees LatifTotal crude stocks fell nearly 11 million barrels recently, the largest one-week decrease given that 2019, the most recent data from the U.S. Energy Information Administration (EIA) shows. Unrefined stocks in business storage and the strategic petroleum reserve have fallen by 13 million barrels considering that the start of July, after increasing by 106 million considering that mid-March. Inventories swelled from 60 million barrels listed below the prior five-year average at the end of February to 65 million barrels above it by the middle of this month. (Chartbook: tmsnrt.rs/ 39NsczO) Much of the boost is attributable to a rise in imports from Saudi Arabia, initially filled throughout the volume war, then released over 8 weeks between May 16 and July 10. Unrefined imports from Saudi Arabia soared to as much as 11 million barrels each week, from an average of less than 3 million barrels a week over the previous year. Over the entire eight-week duration, imports from Saudi Arabia were around 50 million barrels greater than the average for comparable periods over the prior year. However in the last 2 weeks, imports have actually hung back to the long-lasting trend, or below, as the volume-war tankers finished discharging. Last week, crude imports from all sources fell to simply 5.1 million barrels daily (bpd), the 2nd slowest rate for 28 years. The slowest was the week ending April 17 – when imports were 4.9 million bpd. Provided shipments stay sluggish, there is no new surge from Saudi Arabia, and a brand-new wave of the novel coronavirus does not cause the economy to stall again, U.S. refiners will slowly take in excess unrefined inventories. The long list of conditions makes clear just how fragile the rebalancing process is likely to be, susceptible both to any premature increase in oil production or a restored slowdown in the economy. John Kemp is a Reuters market expert. The views revealed are his own. Associated columns: – U.S. crude stocks puffed up by after-effects of volume war (Reuters, June 11) – U.S. crude stocks swell as tankers from Saudi Arabia discharge (Reuters, May 29) – Saudi Arabia ought to call a truce in oil rate war (Reuters, March 19) – Saudi Arabia tries shock techniques to bring oil war to quick end (Reuters, March 10) Our Standards: The Thomson Reuters Trust Principles.