US Oil Storage Analysis - What Is Storage Telling Us?

For the week ending July 11, we have a small crude draw of 0.88 million bbls. This will be lower than the 5-year average draw of 2.282 million bbls.

Over the past two weeks, the EIA reported crude storage figures that were ~14 million barrels higher than our estimate. We noted in a post last week that this is likely due to volatile timing on crude imports/exports, which should be corrected over the coming weeks.

The other explanation for the significantly higher crude builds is the materially higher US crude oil production, which is difficult to explain. However, we are not dismissing this potential, so the data for the coming weeks will be crucial to understanding the production outlook.