Navigating the Oil Dilemma: Record Production Meets Historic Low Inventories
Dive into the complexities of the current oil market, where record-breaking US production contrasts sharply with the lowest inventory levels in decades.
On Today’s Energy Shots:
Weekly Energy Industry News Recap
Navigating the Oil Dilemma: Record Production Meets Historic Low Inventories
Weekly Energy News Recap:
EU Considers Gas Price Cap Extension
The European Union is considering extending its February emergency gas price cap in response to the damaged Balticonnector pipeline and evolving Middle East conflict.
Record High Production, Record Low Inventory
Key oil market updates to consider this week:
US oil production hits record high of 13.13 million bpd in Q3
US Department of Energy Announces SPR Buyback at $79/bbl target
US SPR at ~40-year low of 350 million barrels
Cushing, Oklahoma at record low of 21 million barrels (1 MMbbl above min.)
Venezuela’s 6-month sanctions waiver v. Chinese teapots v. US imports
US distillate v. gasoline inventory
Brent and WTI notched weekly gains of over 1% but settled lower Friday after Hamas released two US hostages from Gaza.
Friday’s losses signal the broader market’s tunnel vision on the conflict in the Middle East.
With tunnel vision comes blind spots and added risk.
Today, we zoom out to bring context to the global crude supply picture, starting with US production and the US-Venezuela sanctions-relief package.
This week, the EIA reported that US crude production set a record of 13.13 million barrels per day in the third quarter.
The EIA projects US production will increase again in the fourth quarter to 13.16 million bpd.
On Wednesday, the US and Venezuela struck a 6-month deal to lift restrictions on Venezuelan oil production, exports, and sales.
Will increased US/Venezuelan supplies be enough to overcome the global deficit?
Two factors muddy that argument:
Sapped global crude inventories, accelerated by OPEC+ cuts.
Venezuela’s limited oil supply, road to recovery, and existing export partners
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