This is a really well thought out analysis. I agree with you that the consensus view of massive inventory builds seems overblown. The fact that OECD inventories haven't shown the 100M barrel build that prices are implying is a key tell. Your point about OPEC+ bumping up against physical capacity constraints for the voluntary cutters other than the big 3 is really insighful. The dynamics here are complicated becuase you have Russia's refineries getting hit by Ukraine shifting crude to water rather than actual new supply. I think you're spot on about spring/summer 2026 being the real concern when demand picks up seasonally and spare capacity is near zero. What worries me most is the market focusing on near term oversupply and not looking at the structural underinvestment across the sector, which affects majors like TotalEnergies and others. The fact that US producers are hedging but still facing lower tier 1 inventory and declining rig counts tells you the tredmill is slowing down. Really appreciated this contrarian take on the supposedly spooky Q4, the real scare might be 9 months from now like you said.
This is a really well thought out analysis. I agree with you that the consensus view of massive inventory builds seems overblown. The fact that OECD inventories haven't shown the 100M barrel build that prices are implying is a key tell. Your point about OPEC+ bumping up against physical capacity constraints for the voluntary cutters other than the big 3 is really insighful. The dynamics here are complicated becuase you have Russia's refineries getting hit by Ukraine shifting crude to water rather than actual new supply. I think you're spot on about spring/summer 2026 being the real concern when demand picks up seasonally and spare capacity is near zero. What worries me most is the market focusing on near term oversupply and not looking at the structural underinvestment across the sector, which affects majors like TotalEnergies and others. The fact that US producers are hedging but still facing lower tier 1 inventory and declining rig counts tells you the tredmill is slowing down. Really appreciated this contrarian take on the supposedly spooky Q4, the real scare might be 9 months from now like you said.