Roadblocks on the path to oversupply
Commentary summary:
• High margins are evidently keeping crude intake in the US very high while post-turnaround buying is ramping up.
• Some contributors to the flood of crude exports recently may fade or be forced off the market yet.
• Oil structure needs to see hard evidence of oversupply in OECD inventory still.
Last week it seemed the flood of oil was finally here. Brent spreads at 60c were not anticipated from this corner anyway.
It is still early days, and it does take weeks before large volumes of oil on water make their way to onshore inventories (exactly how much depends on a lot of factors including demand).
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