Energy Prospectus

Slides from Reuters: https://fingfx.thomsonreuters.com/gfx/c ... 2-2023.pdf

The record decline in OECD petroleum inventories must be stopped. Oil-Based products will first be "rationed by prices" and if that does not balance the market physical rationing of transportation fuels may be necessary. For the U.S., diesel is going to be the first big problem.

Thanks Dan!

Based upon the chart on page 7, we have completely worked off the Covid Crude Surplus. Looks like we will hit the 2013 OECD Inventory low about Mid April. My guess is that we have leveled off to a new slightly lower trend, and will now resume the former growth rate of adding 1 Mb/d of new demand every 13 months (looking at page 14).

Based upon the Inflation Adjusted Crude Prices, it doesn't seem to me we are anywhere close to a 2011-14 level of economic drag. I know Energy is a big part of inflation, but it seems Post Covid Stimulus Recovery is the major factor, and that is slowly working itself off. Consumers have greatly increased borrowing recently, which implies they've blown through any 2020 savings accumulation. The only question is Will The Fed Overplay Their Hand and Kill Demand?

Kevin