Global Oil Stockpiles Slow, Brent Holds Above Goldman's Prediction
Goldman Sachs assesses that the increase in global crude oil stocks has slowed in the past two weeks. The average increase in stocks is now around 700,000 barrels per day, lower than previously estimated.
This figure is significantly lower than the average of 1.7 million barrels per day in the previous four weeks. This signals that the supply buildup is not as rapid as the market initially feared.
Two main factors are cited as contributing factors: production disruptions in Kazakhstan and cold weather. Both are restraining supply flows while simultaneously maintaining strong energy demand, preventing stockpiles from rising sharply.
Although the rate of stockpiles has slowed, Goldman believes that the majority of the buildup is still occurring in storage centers most visible to the market. This means that observed stockpiles are clearly concentrated in locations that serve as global price benchmarks.
Goldman also highlights that commercial inventories in OECD countries account for almost the entire estimated increase in global stocks in the past two weeks. In other words, stocks are increasing primarily in regions where data is transparent and readily available to the market.
On the other hand, oil-on-water volumes—oil stored on ships—did peak at the beginning of the month, but levels remain high. This situation keeps the market on edge, as "floating" supplies could come ashore at any time and depress prices.
Most strikingly, sanctioned suppliers such as Russia, Iran, and Venezuela are said to account for around two-thirds of oil stocks stored at sea, even though they only contribute around 14% of global production. This indicates distribution bottlenecks and geopolitical pressures are contributing to shifting storage patterns.
Amidst all this, Brent is trading in the $64–$65 per barrel range, around $4–$5 higher than Goldman Sachs' January forecast. Goldman believes that about half of the upward price surprise stems from the Kazakhstan disruption, while the remainder is driven by rising geopolitical risk premiums, particularly related to Iran. (asd)
Source: Newsmaker.id
