Crude inventories in the US are dwindling faster than expected, having almost contracted to the lowest levels in the last 40 years.
Opinion columnist at Bloomberg Javier Blas reported that US strategic crude reserves are about to reach 358 million barrels, the weakest level in the recent four decades. The expert warns it might happen if the US cannot stall draining its inventories by October, the period when Washington plans to give up trading its own petroleum products.
US oil reserves measured 621 million barrels in the same period a year ago. For the time being, the White House is making efforts to subdue oil prices through sales of its own strategic reserves. Apparently, Washington cannot pursue this policy for long. As soon as the US runs out of its strategic reserves, oil prices will instantly shoot up.
Besides, Javier Blas reminded us that US blended crude hardly suits any oil processor. The most valued grade in the global market is crude with high sulfur content drilled in Russia, Venezuela, and the Middle East. Almost 85% of sales contracts for high-quality blends account for these oil exporters. The US provides only low-sulfur crude which does not satisfy a lot of buyers.
The International Energy Agency (IEA) posted a survey on its website in mid-June, reading that global commercial supplies of crude and petroleum products expanded by 77 million barrels in April. Still, the world’s oil stocks remain below 5-year average figures.