(+) Global Oil Market Update

From May through July the OECD crude stocks decreased sharply in the wake of OPEC-plus’s decision to extend its production cuts in a complex deal. OPEC-plus members dilemma with lower crude prices than meets their target to balance their budget and the loss of market share keeps looming over the group of oil producers. The plan is to increase output with releasing the voluntary cuts gradually by about 180 000 bpd monthly starting December. This to regain lost market share without upsetting an unstable oil price. 

According to market data the OECD commercial crude stocks came in about 1.035 billion barrels in September. After the sharp decline in May, June and July with a monthly draw of approximately 20 million barrels of stocks, the draw slowed in the following months of August and September to roughly 6 million barrels for August and flat in September according to recent data. 

With the OECD inventories declining in the last months, the non-OECD commercial inventories have gained approximately 75 million barrels since April. The main driver behind the increase in non-OECD inventories is China, who added roughly 86 million barrels, while the rest of non-OECD countries saw a draw of about 11 million barrels.