Global Oil Stocks Up Despite OPEC Cuts Nearing Q1-End

As the Organization of the Petroleum Exporting Countries' market rebalancing nears the end of the first quarter, global stocks of oil are up across all calendar measures – week, month and year – Orbital Insight's oil tank-monitoring data shows.

Collated from Orbital Insight Energy, which covers more than 25,000 floating roof tanks monitoring over five billion barrels of oil storage capacity worldwide, the data shows builds in key OPEC countries, as well as the world's top oil importer China.

The year-on-year global surplus of 84.3 million barrels per day is led by China, with a notable growth of 66 million bpd over the last year.

For OPEC countries, the inventory build is 22.46 million bpd year-on-year.

Stocks are also up in the United States, particularly at the Cushing, Oklahoma storage hub for oil delivered against the U.S. West Texas Intermediate crude benchmark. In Cushing, the growth is 14.97 million bpd over the last year. Overall U.S. floating roof tank stocks built modestly and are now slightly above last year's levels.

The only datapoint that shows a year-on-year decline is for OECD countries, where inventories declined 19.28 million bpd year-on-year after headwinds to European economies, which constitute about two-thirds of this group.  Even so, the weekly and monthly measures for OECD, a major component of world energy demand, had surpluses of 2.41 million bpd and 11.25 million bpd, Orbital Insight data showed.

The findings underscore the difficulty OPEC faces with its supply-demand rebalancing program, with inventories not drawing in its own 15 member countries. This is despite the resolute commitment shown by Saudi Arabia in exceeding supply cuts originally pledged by the kingdom.

Orbital Insight Energy OPEC Data

The energy ministers of Saudi Arabia and Russia, which leads a separate group of ten countries that have joined OPEC in cutting production, meet in Baku, Azerbaijan this weekend to discuss market issues.

The enlarged 25-member OPEC+ will meet on April 17th, making the next few weeks critical to framing the demand outlook for oil for the balance of 2019.

In its March monthly report, OPEC said 2019 demand for its crude was likely to average 30.46 million barrels per day – some 130,000 bpd below levels forecast in February – and indicated that its production cuts may have to continue for now.

"While oil demand is expected to grow at a moderate pace in 2019, it is still well below the strong growth expected in the non-OPEC supply forecast for this year," OPEC said in the report.

"This highlights the continued shared responsibility of all participating producing countries to avoid a relapse of the imbalance and continue to support oil market stability in 2019."

OPEC has already indicated that its April meeting, while important for formulating supply-demand strategies, might not make any changes to its basic target of removing 1.2 million bpd from the market – pushing a review of that commitment to its June meeting.