Fairly constructive inventory figures yesterday for crude oil, yet futures could not hold their gains.  I suspect there is a wide assortment of reasons for the late day weakness, including but not limited to: 1) More EV articles yesterday 2) US crude oil production posted a solid increase from prior week 3) Talk of Trump administration opening additional drilling leases.

Despite the weak price action and seemingly endless negative newsflow, I do want to point out some constructive data from yesterday.  Total demand for US petroleum products was exceptionally strong last week and as the chart shows below, it continues to trend higher.  This trend is aided by growing US exports of petroleum products, although that didn’t play a major role in last week’s strong overall demand.

US Total Petroleum Product Demand

Weekly US Petroleum Products Net Imports

Despite a lot of focus on the coming EV surge (and I think that focus is indeed justified) it’s important to keep in mind that demand today is looking pretty robust.  That said, markets are lower this morning on news that Saudi oil export upticked last month, perhaps calling into question the Saudi commitment to rebalancing supplies.  Despite still producing less than their quota, the Saudis did increase production in June, raise exports, and lower prices to Asian markets.  None of this is a good look for the oil market which is really struggling right now.

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