The balanced market delusion

It seems funny that so much attention is given to the so called "oil glut" that tanked prices. Then the reduction of said glut has driven prices higher. The huge 300 million barrel surplus has been reduced down to only 50 million barrels. This sounds impressive but lets put this in perspective. 300 million barrels is hardly a glut when the world is consuming close to 100mbpd. That is 3 days cover. They (OPEC+) have managed to reduce that glut to 0.5 days coveršŸ‘ After a year and a half of strict cutsĀ and jawboning they have managed to remove 2.5days worth of forward cover. That is also according to OECD stock levels which doesnt include China which has been stock piling a significant amount of crude for their new futures contracts. It seems like not a lot has changed when looking at it like this, however here we are with crude prices going from $100+/barrel to $26 and now back above $70. Just another way of looking at it.

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Guess this is where the sentiment comes in rather than the fundamentals and technicals.Ā 

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Economists are even calling the most recent 'surge' "artificial"...

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