Oil & Energy
Global Oil Stocks Rebuilding as Gulf Exports Recover, Demand Outlook Weakens, TPH Says
Global crude inventories rose in June as Gulf producers accelerated exports, but underlying stock levels remain significantly depleted, with weaker demand projections continuing to weigh on market sentiment, TPH Energy strategists said in a note on Friday.OECD commercial inventories fell by about 1 million barrels in May to about 2.76 billion barrels, leaving stockpiles about 59 million barrels below their five-year average, TPH analysts said, citing the International Energy Agency's July Oil Market Report.Jeff LeBlanc, analyst at TPH Energy, said that the drawdown followed a downward revision to April inventories of about 36 million barrels, with the market estimated to have been undersupplied by about 5.5 million barrels per day in May.Beyond OECD stocks, TPH said that global observable oil inventories declined by about 73 million barrels in May, including a reduction of about 72 million barrels in government-held inventories.However, preliminary figures indicate a reversal in June, with global inventories rising by about 21 million barrels as Gulf producers ramped up exports and oil held at sea increased.The bank said that oil-on-water inventories climbed by about 117 million barrels as Gulf loadings surged by about 53%, while strategic stock releases slowed to about 1.5 million b/d from government reserves, down from about 2.3 million b/d in May.TPH said that despite the June increase, underlying onshore inventories continued to tighten. Preliminary data showed global onshore stocks fell by about 96 million barrels, including a decline of about 41 million barrels in China.Since February, the latest IEA data shows that global onshore inventories have fallen by about 349 million barrels.TPH said that the IEA continued to lower its demand expectations, with 2026 consumption now projected to contract by about 1 million b/d, about 100,000 b/d weaker than the previous estimate.The bank said oil deliveries in Q2 are estimated to have fallen by about 4.8 million b/d year-over-year, compared with an earlier estimate of a 5 million b/d decline.The IEA expects demand growth to return in Q4, with consumption forecast to rise by about 1.2 million b/d YoY. For 2027, the agency maintained its forecast for global oil demand growth at about 2 million b/d.Gulf oil flows showed signs of recovery in June as producers increased shipments from storage and boosted production following earlier disruptions.Total Gulf exports were estimated at around 16.1 million barrels per day during the month, with about 7.9 million b/d moving through alternative routes and about 8.2 million b/d transiting the Strait of Hormuz, TPH analysts said, citing the IEA.Crude production in the region increased by about 3.5 million barrels per day, led by major producers within OPEC and the UAE.LeBlanc said that Saudi Arabia, the UAE, Kuwait and Iraq accounted for most of the increase, raising output by about 900,000 b/d, 900,000 b/d, 630,000 b/d and 490,000 b/d, respectively. Iran's crude production was largely unchanged from the previous month.However, despite the recovery, TPH said regional output and exports remain well below pre-conflict levels. Gulf production remains about 11.4 million b/d below earlier levels, while exports are down about 7.9 million b/d.
