(WCTW) The Oil Market Is Not Ready For What's Coming

In 2022, the US bailed out the global oil market by aggressively releasing SPR.

The end result was a massive depletion in US crude storage. But US commercial crude storage saw overall builds thanks to the aggressive SPR release. In addition, the rest of the world benefited from very elevated US crude exports.

Strong US crude exports persisted into 2023 with US commercial crude storage sitting near 5-year averages, but that's all about to change.

Here is a chart of global crude exports excluding the US:

With Saudi and Russia now cutting production voluntarily, the US is the only meaningful production growth. The oil market, as a result, is not prepared for the possibility that US crude exports decline going forward due to tightness in the domestic market.

Looking at our US crude storage projections over the next 4-weeks, we see US commercial crude storage falling to a multi-year low: