Based on EIA data published for the week ended 22nd March last week, there were no real issues in terms of storage. However, that is all about to change, in the opinion of Robert Rennie from Westpac Institutional Bank.
Key quotes
“Given the current backdrop of what could be as much as a 15mbpd shock to global demand coinciding with what could be as much as a 5mbpd shock increase to global crude supply, the focus in paper crude markets will very quickly turn to storage capacity.”
“Industry anecdotes are suggesting that pipes are beginning to fill and crude that was being piped to the gulf is suddenly becoming landlocked. Such is the case with WTI Midlands.
“Assuming the current supply/ demand picture continues, we tend to see this as a glimpse of what may be to come for WTI – a drop into the ‘teens’.”
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