Strait of Hormuz Closure to Deplete Global Crude Oil Inventories, Commerzbank Says
Hopes for a swift reopening of the Strait of Hormuz have faded, which means there is an increasing need to draw on inventories, Commerzbank said in a Friday note.Even if shipping traffic through the strait gradually resumes starting in June, the U.S. Energy Information Administration expects a sharp decline in industrial oil inventories in OECD countries, the bank noted.In this scenario, the drawdown of global oil inventories is expected to average 8.5 million barrels per day in the second quarter.Market participants are likely to focus increasingly on inventory trends, especially if no agreement to end the war is in sight, Commerzbank said.In the US, the focus lies on the weekly inventory report from the US Department of Energy. In China, industrial production figures are in focus. If China's refineries have not scaled back processing despite lower crude oil imports, crude oil inventories there are also likely to decline, the bank said.