Analyst John Kemp opined that the bloated US petroleum inventories these past weeks were caused by the aftermath of the Saudi Arabia-Russia oil price war.
In the week to June 5, US total stocks of crude and refined products soared by nearly 12 million barrels. Over the last 12 weeks, the inventories are up by a total of 197 million barrels.
The jump was caused by strong imports of Saudi oil in the height of the volume war in March and April, which caused Saudi oil to tumbled.
US imports from Saudi last week were around 7 million barrels higher than the average over the past year, which essentially accounted for all the inventory build. For the third week running, crude imports from Saudi were more than 1.5 million bpd, exceeding three times the 0.4 million bpd average over the previous year.
Over the last three weeks, imports from Saudi were at 32 million barrels, far exceeded the 9 million-barrel average for any other three-week period in the last year. It accounted for more than 20 million barrels increase in the US stocks reported in the same period.
Kemp predicted that US crude inventories could stabilize once the tankers loaded extra crude in Arabia in late March and early April, at the height of the volume war, have finished discharging within the next week or two, U.S. crude stocks should stabilize.
