TD Notes The Crude Facts
Weekly Oil Charts
TD Investment Conclusion
In the following charts, we summarize the key oil data-points for the global crude oil supply/demand outlook. We highlight the following weekly trends:
1) Bullish inventory report: The EIA reported a bullish, larger-than-expected crude inventory draw vs. consensus and this week's API data. Both gasoline and distillate inventories similarly saw bullish, larger-than-expected draws. Total crude complex inventories now sit 15% below the trailing-five-year average, with gasoline inventories 9% below, and distillate inventories 24% below.
2) OPEC+ increases output quota: In an effort to make up for falling Russian output, OPEC+ has agreed to a 648 mbbl/d production increase for both July and August (vs. 432 mbbl/d previously). In our view, the higher quota will do little to ease the global supply gap, as OPEC+ has consistently fallen short of its monthly supply increase quota since it was set in mid-2021.
3) North American refined product cracks remains strong: 3-2-1 cracks across major North American markets sit at US$43-US$47/bbl (five-year average US$9-US $19/bbl) as fundamentals remain strong and refiners struggle to keep up with robust global demand (refinery utilization sits at 93% vs. five-year average at 88%), in our view. See our latest North American downstream outlook note.