Oil Tracker From a Balanced Market in June to Deficits in Early July(1)pdf
Oil Tracker From a Balanced Market in June to Deficits in Early July(1)pdf
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  1. Please find an update of high frequency oil data we track on inventories, supply,demand, prices, and positioning. Chart of the WeekExhibit 1: The Inventory Draws Accelerated to -0.9mb/d This Week in Early July, Following a BalancedMarket in JuneSource: PJK ARA, PEJ, Kpler, Oilchem, Refinitiv Eikon, Goldman Sachs Global Investment ResearchYulia Zhestkova Grigsby+1(646)446-3905 |yulia.grigsby@gs.comGoldman Sachs & Co. LLCDaan Struyven+1(212)357-4172 |daan.struyven@gs.comGoldman Sachs & Co. LLCCallum Bruce, CFA+1(212)902-3053 |callum.bruce@gs.comGoldman Sachs & Co. LLCJeffrey Currie+44(20)7552-7410 |jeffrey.currie@gs.comGoldman Sachs InternationalOil Tracker: From a Balanced Market in June to Deficits in Early July7 July 2023 | 8:50PM EDTInvestors should consider this report as only a single factor in making their investment decision. For Reg ACcertification and other important disclosures, see the Disclosure Appendix, or go towww.gs.com/research/hedge.html.
  2. InventoriesExhibit 2: The Inventory Draws Accelerated to -0.9mb/d This Week, with the June Average Build/Draw at0.0mb/d, Close to the GS Expectation of a 0.1mb/d Draw...GS Forecast shows daily forecast of stocks estimated to match monthly averages from our balances.Source: PJK ARA, PEJ, Kpler, Oilchem, Refinitiv Eikon, Goldman Sachs Global Investment ResearchExhibit 3: ...With Draws Over This Week Concentrated in Crude on WaterSource: PJK ARA, PEJ, Kpler, Oilchem, Refinitiv Eikon, Goldman Sachs Global Investment Research7 July 20232Goldman SachsOil Tracker
  3. SupplyExhibit 4: Our Russia Production Nowcast Remained at 10.8mb/d This Week, and Now Averages 10.9mb/d inJune (vs. GS Expectation of 11.0mb/d)...Source: IEA, Petro-Logistics, Kpler, Industrial Info Resources, Goldman Sachs Global Investment ResearchExhibit 5: ...As Lower Seaborne Exports Were Roughly Offset by Higher Port Stocks and Refinery RunsSource: IEA, Petro-Logistics, Kpler, Industrial Info Resources, Goldman Sachs Global Investment Research7 July 20233Goldman SachsOil Tracker
  4. Exhibit 6: The US Oil Rig Count Declined by 5 This Week, Down 14% From the Late 2022 PeakSource: EIA, Genscape, Baker Hughes, Haver Analytics, Goldman Sachs Global Investment ResearchExhibit 7: Seaborne Net Exports by OPEC Countries Which Announced a Cut in April Dropped 1.2mb/dBelow April Levels This WeekWe show seaborne net exports—exports minus imports—for the six OPEC countries, which announced a cut on April 2nd 2023.Source: Kpler, Goldman Sachs Global Investment Research7 July 20234Goldman SachsOil Tracker
  5. DemandExhibit 8: Our China Oil Demand Nowcast Increased by 0.4mb/d This Week to 15.9mb/d, Which Is 0.3mb/dAbove Our July 2023 Forecast...Source: IEA, ICIS, Oilchem, Bloomberg, Industrial Info Resources, Kpler, Goldman Sachs Global Investment ResearchExhibit 9: ...Following an Increase in Net Imports of Products and Larger Refinery RunsSource: IEA, ICIS, Oilchem, Bloomberg, Kpler, Goldman Sachs Global Investment Research7 July 20235Goldman SachsOil Tracker
  6. Exhibit 10: We Still Expect Rapid Jet Growth in JulySource: OAG, IEA, JODI, Goldman Sachs Global Investment ResearchExhibit 11: China International Jet Demand Is Recovering Only Gradually Source: OAG, Goldman Sachs Global Investment Research7 July 20236Goldman SachsOil Tracker
  7. PricesExhibit 12: Latest July 6th Brent Timespreads Was 13pp Below Inventory-Implied Fundamentals...The June 2023 timespreads “predicted by stocks estimate” estimate uses our GS projection for OECD commercial stocks in July-October 2023.Source: IEA, CME, Goldman Sachs Global Investment ResearchExhibit 13: ...As the Latest Brent 1/36M Timespreads Are Still Lower than Inventories SuggestSource: IEA, CME, Goldman Sachs Global Investment Research7 July 20237Goldman SachsOil Tracker
  8. Exhibit 14: Average Crude 1M/2M Timespreads Doubled This Week, and Now Stands at 0.6%Basis represents the difference (in % of 1M ahead futures) between spot physical crude futures and 1M ahead financial futures. We include Brent, Dubai, and WTI in crude basis on the left panel andBrent, Dubai, WTI, Mars, Midland, LLS, and WTI-MEH in 1M/2M timespreads on the right panel. We construct average crude spreads by first taking an unweighted average of crude types within aregion and then taking a production-weighted average across regions.Source: Platts, CME, Goldman Sachs Global Investment ResearchExhibit 15: Latest Near-term Timespreads Turned Positive for Light Crude and Increased Further for Medium CrudeWe measure WTI Cushing crude basis as WTI Calendar Delta in percent of 1M ahead WTI futures.Source: Platts, CME, Goldman Sachs Global Investment Research7 July 20238Goldman SachsOil Tracker
  9. PositioningMethodology Notes for GS High Frequency Oil Indicators1.Stocks: We aim to capture all visible oil stocks for both crude and products. Ourdata includes onshore crude stocks, crude oil on water, products on water, andmeasures of products stocks at various locations. The locations are the US, ARA(Antwerp-Rotterdam-Amsterdam) in Europe, Fujairah in the Middle East, andSingapore and the locations covered by Longzhong in China. The China Longzhongstocks cover all stocks except for those at SOE refineries, gas stations, and thenational strategic reserves. To estimate seasonal effects, we use monthlyExhibit 16: Oil Net Managed Money Increased This Week to 291mb, but Remains Very Low at Percentile 5We report the percentile of oil net managed money as a percent of open interest in a sample from January 1st, 2017 till the most recent observation.Source: CFTC, Refinitiv Eikon, Goldman Sachs Global Investment Research7 July 20239Goldman SachsOil Tracker
  10. supply-demand imbalances pre-2019, and daily stocks data by component after. Theprojection of global visible stocks uses our supply-demand imbalance projections. 2.Russia total liquids production: Our Russia supply nowcast estimates total liquidsproduction as the sum of refinery runs, crude stock changes at ports and refineries,and crude seaborne and pipeline exports. (Latest methodology here).3.US crude production: We show daily pipeline-implied production data provided byGenscape (owned by WoodMackenzie) with weekly releases from the EIA’s WeeklyPetroleum Status Report, and monthly releases from the EIA’s Petroleum SupplyMonthly. Lower 48 includes all US production from the US excluding Alaska andHawaii but including the Gulf of Mexico.4.China oil demand: Weperform a bottom-up nowcast of China oil products demandas the sum of refinery runs, net products imports, and product stock draws. Due tothe partial availability of the data, we rescale the components using a regressionmodel with IEA total monthly demand data as the benchmark. Refinery runs areestimated both for SOEs and for independent refiners, where we model capacity.(Latest methodology note here).5.Jet demand: Our methodology for measuring jet fuel demand uses globalcommercial flight schedule data combined with our aircraft efficiency database. Wefurther calibrate this model on monthly IEA/JODI jet-type kerosene demand data forthe OECD and a handful of other countries to estimate non-commercial flightdemand.6.Brent timespreads: We estimate timespreads using our forecasts for OECDcommercial stocks (which in turn rely on our global supply-demand imbalanceforecasts.) We estimate Brent 1/36M timespreads based on the historicalrelationship with 1-4M ahead OECD commercial stocks as days of demand coveredvs their 5-yr average. (Latest methodology here.)Yulia Zhestkova GrigsbyDaan Struyven7 July 202310Goldman SachsOil Tracker
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