Think About This
INVESTMENT RESEARCH
This rapid global demand recovery has been faster than the supply response . OPEC + Russia have opted for a steady increase in production . This may have been in response to fears of a relapse in demand , which probably seemed prudent at the time given the spread of the Delta variant . But we think it is likely to be as much about the technical requirements of turning the taps back on . Besides , high prices are a real boon to Middle Eastern and Russian budgets .
TOTAL OPEC PRODUCTION
40000
35000
OPEC crude oil production ( mbbl / d )
30000
25000
20000
15000
10000
5000
0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sources : Bloomberg , Deltec
With demand currently running above supply , inventories have fallen and prices for crude oil and petroleum products have hit levels not seen in years . Total US crude oil inventories now stand at 434 million barrels as of October 29th 2021 . The latest EIA weekly report showed crude oil stocks at the Cushing Oklahoma storage hub fell to 26.4 million barrels , the lowest level in 3 years . Increased demand across the globe has also meant other countries have turned to the US for crude oil , further drawing down stocks at Cushing .
CUSHING OKLAHOMA CRUDE OIL STOCKS VS . 5YR RANGE
80000 70000 60000 50000 40000 30000 20000 10000
0 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
High & Low ( 2016-2020 ) Average ( 2016-2020 ) 2021 Sources : Bloomberg , EIA , Deltec
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