Oil Inventories Weigh on Market Even as Peak Demand Arrives: Vitol

The oil market which normally enjoys peak demand during the summer holiday driving season is facing ‘extremely high levels’ of oil product inventories on water, according to Vitol’s head of Asia Michael Muller, cited by Platts.

• There is also a perception of ‘high inventories’ in importing markets such as China, Muller said on the Gulf Intelligence podcast.
• Previous market consensus expected that oil demand growth this year was enough for OPEC+ to consider unwinding some of their cuts without destabilising prices.
• However, original forecasts seem to have been overestimates, Christof Ruhl, senior research scholar at Columbia University said.
• Nonetheless, US driving season is forecast to ‘look pretty good’ and jet fuel demand may be at record high’s this summer, Muller said.
• There may be additional demand for power fuels in countries such as India and Japan.