Low U.S. Crude Oil Inventory Levels.
Increased Risk for Volatility.
- Production Levels?
- Price Band?
- In the US specifically, on August 18, crude oil inventories were currently at very low levels (more than 11% below last year’s levels).
- In terms of Days Supply of Forward Demand, OECD oil inventories are also very low.
- With low inventories there is an increased risk of price volatility, as was seen in the distillate market last winter, and more recently, the gasoline market this summer.
- So the question comes back to what will OPEC do?
- Will they increase production quotas?
- Will they adhere to this $22-$28 price band?
- Will OPEC cohesion crumble with increased production?