Energy Prospectus

From Morgan Stanley Research 7/12/2018

For the week ending July 6, 2018, from all oil inventory data that are available on a weekly basis for the U.S. from EIA, Japan from PAJ, Antwerp-Rotterdam-Amsterdam (ARA) region from Genscape and PJK, and Singapore from IE.

"Total OECD oil inventories drew substantially, by 10.6 million
barrels, last week. This was driven by an above-average draw
in crude stocks of 13.9 mln bbls. Product stocks built by 3.3
mln bbls, led by a 5 mln bbl build in distillate stocks, while
fuel oil stocks fell by 3.3 mln bbls."

U.S. Inventories days of supply
Crude Oil at 22.9 days (down 0.8 days from prior week) < Compares to 29.0 days of supply on 7/7/2017. IMO this is getting serious. Below 20 days of supply goes to "critical".
Gasoline at 25.0 days
Jet Fuel at 21.3 days
Distillates at 31.7 days < IMO this one is deceiving because so many countries in South America rely on steady diesel supply from the U.S. We export ~1.4 million barrels per day of diesel.

From this weeks IEA "Oil Market Report"

"OECD commercial stocks rose 13.9 mb in May to 2 840 mb, only the third monthly increase since July 2017. However, stocks gained only half as much as normal. At end-month, OECD inventories were 23 mb below the five-year average. Preliminary data show stocks falling in June."

"Global refining throughput will grow by 2 mb/d from 2Q18 to 3Q18, with more than half of the increase in the Atlantic Basin. Runs are forecast to reach 82.8 mb/d, 0.7 mb/d higher than the previous record level in 4Q17. This could result in large crude stock draws, exceeding 1.4 mb/d. Refined product stocks will seasonally increase by 0.6 mb/d."