Link here. The amount of crude oil in storage, excluding the SPR, now equals 42.0 days of supply.
This is unprecedented. That's more than twice what would be healthy for the oil industry.
By the way, I was wrong on this. I thought "days supply" would max out at 38 days. Maybe 39 days. I forget what I wrote about a month ago.
There are two variables; I forgot about the second variable. I was only looking at the first variable.
Actually, the first variable is not a variable at all: it is a fixed number -- relatively fixed -- the amount of onshore storage. Of course that is not "completely" fixed but week-to-week it should not change much.
The second variable is a true variable and requires a talent for very sophisticated calculus and a crystal ball -- neither of which I have -- and that's "demand."
If one assumes "steady demand," then "storage" becomes the only "relative" variable.
But if demand for the foreseeable future drops to zero, a ludicrous proposition, then any amount of oil in storage would be "an infinite number of days in storage."
And as long as I've digressed this much, the on-shore US storage greatly under-estimates the amount of oil that affects the EIA's "US days of supply." Certainly those twenty or so VLCCs/ULCCs off the coast of Long Beach holding Saudi oil would have some effect. Like so many data points, the US days of supply is simply one data point, and I guess, not a very good one at that, either.
A reader by the way, via comments suggests there may be some under-reporting of US production. To back him up:
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