Inventories: Sharp Drop in Oil at Sea Heralds Lower Inland Stocks

Oil in transit and held in floating storage continued to decline sharply in May, as Opec-plus production cuts took hold and fuel in tankers found its way to buyers. In due course, less oil on water should reduce inland oil inventories, as demand must be met by already stocks. With another 1 million barrel per day cut in production from Saudi Arabia starting in July, the numbers should drop further for crude oil. Rates for very large crude carriers have dipped. With refineries coming out of maintenance, product flows should grow again.