Balance: August Surplus Extends Market’s Breathing Room

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Preliminary balances show that liquids supply was again 1 million b/d higher than product consumption in August. The second and third quarters of 2022 tabulate a crude oil surplus of an average 900,000 b/d — for a total 160 million barrels. It helps explain some of the softness in the crude and product prices and gives the market some breathing room. Real world inventory data, however, is not yet corroborating the implied surplus. Commercial crude stocks have moved up since March, thanks to major releases from government reserves. And inventories for ‘other’ products are rising, as they should, like for propane in the US, which have no impact on global oil prices. But stocks for key products like gasoline, diesel and fuel oil are expected to be flat by the end of September compared to the end of March.

Oil Supply, Oil Demand
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