Summary of J.P. Morgan's North America Commodities Research Call Industry Overview - Industry: Oil and Commodities - Date: February 20, 2025 Key Points Oil Demand and Supply Dynamics - Global oil demand increased by 1.4 million barrels per day (mbd) in February, averaging 103.4 mbd through February 19, 2025, which is 400 kbd short of the projected 1.8 mbd rise for the month [5][6][12] - OPEC is considering delaying monthly supply increases scheduled for April, indicating a cautious approach due to anticipated growth in non-OPEC+ supply [5][6][12] - The Ukrainian drone attack on the Kropotkinskaya pumping station is expected to reduce crude oil flow from Kazakhstan by 30%, leading to a 360 kbd drop in Kazakh oil exports [5][6][12] Inventory and Stock Analysis - CPC crude stocks have remained steady at 2.5 million barrels (mb) since February 11, 2025, despite the disruption [6][12] - OECD commercial oil stocks recorded a net draw of 4.5 mb in the second week of February [6][12] - The rerouting of Kazakh crude oil to Baltic Sea ports is expected to draw down Europe’s commercial crude storage by 10.5 mb over a 60-day period [5][6][12] Regional Insights - In the U.S., diesel cracks have retreated from recent highs due to lower product exports to Latin America, while gasoline consumption is expected to rise from 8.3 mbd to above 9 mbd during the peak travel season [5][6][12] - Four economies reported oil consumption statistics, with notable declines in Portugal and France, while India showed a significant increase of 170 kbd year-over-year in January [5][6][12] Price Movements - Oil prices are on track to end the week higher, with global crude prices rising by 77 per barrel, aligning with the fair value estimate for February [5][6][12] Future Projections - The ongoing cold weather in the U.S. and increased industrial activity in China are expected to help close the gap in oil demand projections for February [5][6][12] - Gasoline cracks are projected to average 2 per barrel from current levels [5][6][12] Additional Insights - The Atyrau-Samara pipeline has a spare capacity of 157 kbd, while the Kazakh-China pipeline has a total capacity of 400 kbd, indicating potential for rerouting crude oil flows [5][6][12] - Despite the BTC pipeline having considerable spare capacity, tanker bottlenecks in the Caspian Sea may restrict substantial transfers [5][6][12] This summary encapsulates the critical insights from the J.P. Morgan North America Commodities Research call, focusing on oil demand, supply dynamics, inventory levels, and price movements.
Oil Demand & Inventory Tracker_ OPEC on hold and alternative routes available for CPC; global demand up 1.4 mbd in February. Thu Feb 20 2025