Replenishing Oil Reserves to Propel Global Demand
A concerted effort to refill oil reserves, particularly in China, the US, and Europe, may elevate demand and prices soon, amid Middle East conflicts affecting key shipping paths.
Supply disruptions from 2022’s sanctions on Russia and OPEC+ cuts have left stocks low, making storage costly for traders.
Red Sea shipping disruptions, due to increased Houthi attacks, have sparked urgency in restocking efforts.
Morgan Stanley predicts tighter oil markets, raising its Brent forecast to $82.50 a barrel for early this year.
FGE noted an unusual early-year drop in oil stocks, contrasting with typical January trends.
The IEA observed a significant stock decrease last November, the lowest since mid-2022, though December showed a slight recovery.
Strong buying from China, Europe, and the US is noted.
China’s aggressive purchasing aims to refill stocks by spring, while the US boosts its Strategic Petroleum Reserve following 2022’s record sales.
Francesco Martoccia of Citi projects the market will require approximately 67 days of demand coverage by the end of 2025.
This assumes OPEC+ extends cuts, thus maintaining storage levels above pre-pandemic norms.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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