My advice to you is simple: follow the signal.
As I’ve said recently, the math is what it is. Generalists can believe whatever headline or narrative that’s being touted, but oil inventories will decline. Whether they will only believe it when it “shows up” or whatever is up to them. I’m not here to hold the market’s hand. I’m here to make money.
Where are we on the oil storage math?
As I’ve been saying since the start of March, the excess oil-on-water drained first. This is gone now.
There’s a minimum volume required for oil-in-transit. So you should not expect this to nosedive any further unless the Strait of Hormuz remains closed until the end of May.
Onshore crude oil inventories are starting to follow suit.
On the surface, this looks like we are still in surplus, but that’s not really the case.
China holds the entire surplus in storage. As I’ve said, this is a national security concern, so China will continue to hoard crude and ban product exports. The product export ban has jacked up Asian refining margins, and sadly, that’s still not enough. Without those teapot refinery product exports, Asia will run low on products in 3 weeks.
As for the rest of the world, the onslaught of the draws is about to hit storage with full force.
Even if the Strait of Hormuz opens this very second, the draws will continue until August. There’s nothing anyone can do about that at this point. The math is what it is.
What about crude exports?
Global crude exports are down ~9 million b/d y-o-y. The data is now confirming all of the math the oil specialists have done over the last month.