Now The Oil Market Makes A Bit More Sense

In the middle of November, I wrote an article titled, "Something Really Strange Is Happening To The Oil Market." At the time, I couldn't wrap my head around the strange price action. On one end, mid-month crude export data for OPEC+ shows a material decrease, but on the other end, price action suggested the physical oil market was in surplus.

Fast forwarding to last week, I wrote a follow-up to that article noting my theory on why the oil market has been so weak. I pointed to the surge in Russian crude exports and the accompanying lack of crude buying in China. 

Spoiler alert, this theory was partially true. What really happened was that OPEC+ did not materially decrease crude exports. In fact, if you look at the finalized figures for November, OPEC+ crude exports were flattish month-over-month.

To be fair, this is not an accurate snapshot of OPEC+. This is because the crude exports figure includes Russia, which saw a surge in crude exports in November.