@Concordplaya

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[Mark @Mark4XX]

CHINA FORFEITS 450 MILLION BARRELS IN ONE MONTH: WHY OIL PRICES ARE CRASHING DESPITE RECORD INVENTORY DRAWS

Eric Nuttall, Senior Portfolio Manager of Ninepoint Energy Strategies, revealed the single biggest reason oil prices have collapsed despite record-low inventories. China quietly slashed its oil imports by 4.9 million barrels per day in June alone, forfeiting nearly 450 million barrels and draining its own hidden stocks. This massive move has temporarily masked the true tightness in the physical market and created one of the largest disconnects between fundamentals and price in decades. The result is oil trading in the high 60s while the real balance sheet screams much higher.

THE INVENTORY REALITY CHECK
➡️ Global oil inventories are at the lowest levels ever seen for this time of year.
➡️ We have moved from a 177 million barrel surplus before the war to a 141 million barrel deficit relative to the five-year average.
➡️ Total inventory draws since the conflict began reach 430 million barrels, creating a 508 million barrel swing compared to last year.
➡️ US commercial oil inventories now sit at their lowest level since at least 2016.

THE PRODUCT SHORTAGE SIGNAL
➡️ Gasoline and distillate stocks show clear shortages in key regions.
➡️ Refinery crack spreads for gasoline and diesel have hit all-time highs, up 182 percent year to date.
➡️ These extreme margins prove strong underlying product demand that contradicts the weak price action.

THE STRATEGIC RESERVE FLOOR
➡️ US strategic petroleum reserves have fallen to 325 million barrels.
➡️ That is the lowest level since June of 1983.
➡️ Advisers close to the issue see 300 million barrels as a practical floor the market cannot breach without serious consequences.

THE CHINA STOCKPILE DRAIN
➡️ China cut oil imports by a staggering 4.9 million barrels per day in June.
➡️ They have forfeited nearly 450 million barrels of imports in a single month, drawing down invisible domestic stocks.
➡️ Yet every mobility indicator from flights to road traffic shows demand remains very strong.
➡️ This buying behavior is unsustainable and the return of Chinese demand will expose the real tightness.

THE TEMPORARY SUPPLY SURGE
➡️ Post-truce tanker traffic out of the Strait has surged to about 10 ships per day.
➡️ Roughly 140 million barrels of previously sanctioned Iranian oil are now accessible to the market.
➡️ Still, 9.4 million barrels per day of regional production remains shut in across the Middle East.
➡️ The market is absorbing a short-term flood that analysts expect will fade within one to two months.

THE FINANCIAL MARKET BLIND SPOT
➡️ Speculative net length in oil has collapsed back to pre-war levels.
➡️ The paper market is pricing oil as if the anticipated glut from before the conflict is still here.
➡️ Physical fundamentals point to an implied fair value of 130 to 140 dollars per barrel.

THE ADMINISTRATION RESPONSE
➡️ Vice President JD Vance stated the goal is to refill the world's oil economy and restock supplies.
"What the president has told us to do is to use this to sort of refill the world's oil economy to refill some stocks and then see where the hand is."
➡️ The timing of the truce announcement right before the market open showed clear concern over energy price impacts ahead of the midterms.

THE BOTTOM LINE
The oil market is far tighter than current prices suggest because China temporarily drained its stocks and a post-truce supply surge is hitting all at once. Once those barrels are absorbed and China returns as a buyer, the real shortage will become impossible to ignore. Energy stocks are already discounting around 60 dollar oil while the marginal cost of new supply sits near 70 dollars.

The rebound in oil prices is closer than the market thinks.

HT: YouTube Ninepoint Partners @ericnuttall
#OilShortage #ChinaOil #InventoryCrisis #EnergyMarkets #OilPrices #MarketRebound #GeopoliticalOil

[@Concordplaya @Concordplaya]

@Globalflows Wouldn't the Jan 2027 Fed Funds contract make a better reference to market expectations for the Fed through 2026?

[@Concordplaya @Concordplaya]

@AnnaEconomist When was this FRB US modelled respnse last released? I agree in part with the outcome btw/

[@Concordplaya @Concordplaya]

@BankUnlimited @josephwang Hearing you. So if a Treasury Security was held in custody with BNY Mellon - That data wouldn't be shown in the FRED Custody Holdings in the chart above?

[@Concordplaya @Concordplaya]

@BankUnlimited @josephwang Large custodial accounts (Non- Fed ) would include Bk of New York - JPM and more. No ruling to force CBks to use the Fed, I sense.

[@Concordplaya @Concordplaya]

@_Investinq Yes, the tone of the auction could be misleading, but in my experience, dealers rarely 'step in' to take down 30yr bonds. Bids would be scaled to miss for the most.

If dealers get left with a larger % than usual, it's normally a negative surprise.

[@Concordplaya @Concordplaya]

@jackstock1973 @GlobalMktObserv Notable nominal size. But they bought the 2026/2027 sector. They might be concerned, but I don't sense buying 1y-2y maturities is optimal.

[@Concordplaya @Concordplaya]

@Funkdepot @LukeGromen Timely comment re T-Bills- as the x-date approaches

[@Concordplaya @Concordplaya]

@garystevensonII @1CoastalJournal I think the SOMA buying would be considered a 'add on' which means it didn't directly have any effect on the auction results, or its participants. Technically, the Treadury ust issued and extra $20bn+ at the award rate.

[@Concordplaya @Concordplaya]

@AndreasSteno @platbearking Sorry... One-off increase ??

[@Concordplaya @Concordplaya]

@musk_news13 👍👍

[@Concordplaya @Concordplaya]

@SantiagoAuFund @KorpioProd Is it not currently and simply 'a mis-marked position' If the gold was marked to current market prices (like most other central banks) It should have no effect on the market prices of Gold.. or silver etc. Selling is a completely separate subject.

[@Concordplaya @Concordplaya]

@GuntherEagleman @SenateGOP @Kash_Patel @TulsiGabbard 👍

[@Concordplaya @Concordplaya]

@TheKouk This aged well😆😆

[@Concordplaya @Concordplaya]

@simonmaechling @VladTheInflator When you slide forward when using an erg, how far should the knees go forward past the foot plates ?

[@Concordplaya @Concordplaya]

@realTrumpNewsX Yes

[@Concordplaya @Concordplaya]

@realTrumpNewsX Yes

[@Concordplaya @Concordplaya]

@HMRCcustomers I live offshore. I have been advised of self assessed tax payments due by January 25, but I have not received payment instructions ?

[@Concordplaya @Concordplaya]

@elonmuskADO 👍

[@Concordplaya @Concordplaya]

@StealthQE4 @CryptoManPig To some degree, with the huge weight of issuance coming in T-Bills and Treasury notes, out to the mid curve, you could argue YCC is already in play.