Global Oil Data Deck (July '22)
Global oil market tightened marginally in May coming off the bottom of China’s lockdown-driven demand losses.
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Crude prices were hammered lower over the past month, with Brent crude falling from above $120 to below the $100 threshold for the first time since April, the peak of China’s most recent COVID-zero lockdowns; the crude futures curve remains acutely backwardated, signaling persistent spot market tightness despite the falloff in flat prices.
Global oil supply-demand balances tightened marginally to an estimated oversupply of 1.7 MMbpd in May—0.6 MMbpd tighter than April, which itself was the loosest month we’ve seen since the beginning of the pandemic.
Global visible petroleum inventories were essentially flat in May and remain extremely low by historical comparison; crude inventories fell while product inventories rose by slightly more through May.
Global oil supply rose by 0.9 MMbpd m/m in May on a combination of continued OPEC production normalization, stabilizing Russian production, further growth in US shale, and a seasonal uptick in Brazilian output
Global oil demand bounced back from the April lows to advance 1.3 MMbpd m/m in May to 97.5 MMbpd, largely as China bounced back from the worst of the COVID-zero lockdowns and the US ramped up towards the driving season.