Global Oil Inventories Have Started To Turn The Corner

I come bearing some good news... finally. Global oil inventories appear to be turning the corner.

First things first, if we look at the latest Brent prompt timespread, you can see that despite the persistent macro headwind, the physical market is starting to tighten a bit.

As we have mentioned in our WCTW this week, China has been a spotty buyer of crude as of late. It has been using its advantage of being a swing buyer when prices drop and disappearing when prices rise. The rangebound oil price action is then no surprise considering that every time Brent gets close to $80, China appears to return to push prices back up only to disappear again.

So how do we know that global oil inventories are starting to turn the corner?