Re-Balancing: Oversupply To Last Longer Than Expected -- Source -- September 17, 2020

The first time I ever tagged a post with re-balancing was back on January 24, 2017. It's worth a read. I might re-post it as a "flashback" article some time. 

Between then and now, on a weekly basis, I have posted the amount of US crude oil in storage. The most recent spreadsheet pretty much tells the story:

I had to hide a lot of rows; if I didn't the spreadsheet would scroll for quite some time.

• week 0, November 21, 2018: 446.9 million bbls crude oil in US storage
• between then and now; rigs drop 75% or thereabouts; and, offshore drilling is pretty much dead;
• week 93, September 16, 2020: 496.0 million bbls crude oil in US storage an increase of almost 11%.

Now this, finally someone seems to be paying attention. Linking to Irina Slave:

OPEC and the International Energy Agency delivered bad news for the oil market this week. Both authorities revised their oil demand forecasts for this year, and both revised them downwards. But it is not just demand that will continue to weigh on oil prices. Supply is excessive and likely to remain so until the end of next year. On Monday, OPEC said in its Monthly Oil Market Report that it expected oil demand this year to shrink by 9.5 million bpd. That’s an upward revision of 400,000 bpd, from an expected contraction of 9.1 million bpd in August.

A day later, the IEA, in the latest release of its Oil Market Report, said it expected demand this year to contract by 8.4 million bpd. That’s a larger demand growth contraction than they were anticipated in the previous month, when the oil industry body expected a smaller contraction of 8.1 million bpd. 

Neither picture is rosy.

What’s even less rosy are the projections for supply. According to both authorities, at the end of next year, the global oil supply will be above levels from end-2019. The exact amount by which end-2021 stocks will exceed end-2019 stocks vary, but the very fact both OPEC and the IEA expect higher oil stockpiles after more than a year of sizeable OPEC+ production cuts is telling. And the story it is telling is not a happy one.

Re-balancing? LOL.