Orbital Data Shows World Indeed Has More Oil Than A Year Ago, Making OPEC Output Hikes Difficult

Khalid al-Falih was right: Orbital Insight confirms there are higher inventories of oil around the world now than a year ago, lending credence to the Saudi Energy Minister’s claim that crude markets remain adequately supplied even with the Trump administration’s move to outlaw Iranian oil exports.

Iran is also having higher stockpiles compared to a year back, although that could be indicative of the struggles faced by the Rouhani administration in shipping its crude while facing one of the greatest offensives in U.S. energy and Middle East policy in years.

As of April 22, crude storage in the oil-producing members of OPEC to the wealthiest nations of the OECD, as well as other countries across the world, was up by 140.42 million barrels from a year ago, data collated by Orbital Insight Energy showed.

Covering more than 25,000 floating roof tanks indicative of over five billion barrels of global storage capacity, the data also showed China as having the single largest build, with a year-on-year rise of 60.71 million barrels.

While its standing as the world’s largest oil importer may merit China having more inventories than the rest, the data also underscores the nation’s resolve to build out its energy storage on its own terms – a major contention for Washington, which has been unable to prevent Iranian oil from landing in that country.

Orbital data shows China as having the single largest build, with a year-on-year rise of 60.71 million barrels
Orbital data shows China as having the single largest build, with a year-on-year rise of 60.71 million barrels

Current Global Inventories for Oil Might Surprise Any Casual Observer

But even after discounting China, current global inventories for oil might surprise any casual observer, not just Falih, given that they have built in an environment of severe output cuts by the Saudi-led OPEC and Russia, as well as outages in war-torn Libya and Venezuela, another country under U.S. sanctions.

More staggering, nearly 75% of the global build in the 30 days to April 22 came in the final week of that month. This was during a time when U.S. West Texas Intermediate and U.K. Brent crude prices were galloping toward six-month highs of $65 and $75 per barrel, respectively. Global inventories rose 32.08 million barrels month-on-month during the period, with 23.69 million of that occurring in the final week.

It was a similar situation with OECD and non-OECD stocks.

In the OECD, month-on-month inventory growth was 24.35 million barrels while the week-on-week rise was 18.48 million. Year-on-year, stocks were up 35.02 million.

At the non-OECD level, monthly stocks rose by 11.75 million barrels versus a weekly gain of 8.64 million. The annual rise was 86.51 million.

Within OPEC, the four major oil producers besides Iran – comprising of Saudi Arabia, Iraq, Libya and Egypt – had higher stockpiles compared with a year ago, despite stringent production cuts.

While Iran’s monthly inventory fell by 340,000 barrels, its weekly stocks rose by 280,000. For the year, the Islamic Republic registered a rise of 7.33 million barrels.

Iran’s monthly inventory falls by 340,000 barrels
Iran’s monthly inventory falls by 340,000 barrels

Saudi Arabia, the lynchpin of OPEC, had a weekly decline of 2.69 million barrels and a monthly drop of 2.22 million. Its yearly stocks still rose by 4.73 million.

The trend was similar in Libya, where forces of Saudi- and Trump-backed general Khalifa Haftar were locked in battle with the U.N-recognized government in Tripoli. Libya’s oil inventories fell by 430,000 barrels on the week and by 1.79 million on the month. Annual stocks rose by 130,000 barrels.

Iraq and Egypt posted increases by all calendar measures. Iraqi stockpiles rose by 440,000 barrels on the week, 600,000 for the month and 2.45 million for the year. Egyptian inventories were up by 2.79 million, 1.23 million and 260,000 barrels, respectively.

Total OPEC inventory rose by 18.91 million barrels for the year.

In the United States, floating roof tanks at the Cushing, Oklahoma delivery point for WTI showed a year-on-year increase of 4.91 million barrels versus weekly and monthly declines on 980,000 and 1.92 million. For all of the U.S., weekly, monthly and annual stockpiles rose by 9.16 million, 8.37 million and 14.76 million, respectively.