US Oil Inventory Data Remains Mixed, Higher Demand Figures Are Needed To For Oil To Break Higher
EIA oil storage report today was mixed with positives and negatives mixed in between. But let's tackle the elephant in the room first: adjustment. No, we do not think this is a made-up figure. We know based on EIA methodology that the adjustment is the "leftover" figure following their supply - demand balance equation.
We know based on physical oil tanker movements, EIA overstated crude exports and understated crude imports for PADD 1, 3, and 5. As a result, the modified adjustment was ~1.7 million b/d vs the ~2.4 million b/d reported by EIA.
However, this doesn't take away from the fact that the modified adjustment came in at the 4th highest ever recorded. Clearly, at ~4 million+ b/d of crude exports, EIA is having a very hard time differentiating what's being exported and what's not. In essence, what we are trying to say is that the modified adjustment will flip in the following week. This has been the case throughout this year even amidst ever-higher adjustment figures.
Looking at our crude storage forecast for next week, we have a monster draw in the making: