Global Oil Data Deck (Sept '22)

July oil market balances hit a fresh pandemic-era oversupply record on the back of deeper Chinese demand declines and further OPEC+ supply

This 42-page September 2022 edition of my monthly data-dense and visualization-heavy Global Oil Data Deck series (attached PDF below paywall) is exclusive to paid Commodity Context subscribers.

Note: This month’s release includes changes to the Chinese demand model to be more fully discussed in a post later this week.

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Overview

• At time of writing, Brent is trading around $91.50/bbl and WTI at $85/bbl after crude prices continued to fall back over the past month, with Brent crude falling below $90/bbl in early September for the first time since before Russia invaded Ukraine.

• Global oil supply-demand balances in July reached their highest level of oversupply since the beginning of the pandemic, with supply outpacing demand by an estimated 2.5 MMbpd (Note: data revisions for June now show that month recording a far tighter 0.9 MMbpd deficit than published in the last Global Oil Data Deck).

• On the back of this oversupply as well as downward pressure on flat prices and calendar spreads through July, global visible petroleum inventories rose at their fastest pace since April 2020 (75 million barrels m/m); but still, inventories remain extremely low by historical comparison. 

• Global oil supply rose by 1.2 MMbpd m/m in July on a combination of continued OPEC+ growth (largely in Russia/Kazakhstan), further seasonal gains in Brazil, as well as a bounce-back reversing the sizable dip in Norwegian production witnessed the prior month.

• Global oil demand fell back by 2.3 MMbpd m/m in July to 97.9 MMbpd, driven by a material 1.2 MMbpd pullback in China coupled with declines in India (-0.4 MMbpd) and across North America (-0.7 MMbpd).