MBCC Trading Highlights 15th September'22 - Oil demand is just NOT there! Market "pinned" till tomorrow, but then?

Oil - why did we say to fade the Oil rally yesterday?

Demand has been our main premise now for months! Our cross asset models had been indicating lower demand for months now which is slowly filtering into the data now, as shown above. Yesterday once again we saw distillate demand come in MUCH LOWER at 3.1 mbpd from 3.6 mbpd. This also saw a massive build in distillate of 4.2 mln barrels. The inventories are slowly building and the case to buy Oil just because "inventories were low" is losing ground. By the time it shows up, it is too late.

AS we said, inventories and time spreads only tell you what IS TODAY, not what WILL HAPPEN TOMORROW.