China, US-led global refill of depleted oil stocks seen buoying demand

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A push to replenish depleted oil stocks notably in China, the United States and Europe could buoy demand and prices in coming months, analysts and traders said, as tensions in the Middle East threaten key shipping lanes.

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Published by

14 Feb 2024

Heavily depleted by supply disruptions wrought by sanctions on Russia in the middle of 2022, as well as protracted OPEC+ output cuts, global oil inventories have barely recovered with traders unable to justify the costs for storing oil.

Shipping disruption in the Red Sea due to escalating attacks by Iran-aligned Houthi rebels has increased concerns about supply, spurring buyers to rebuild inventories.

Morgan Stanley raised its quarterly outlook for Brent crude prices on Tuesday to an average of $82.50 a barrel in the first and second quarters — compared with $80 and $77.50 previously — suggesting the bank now expects a tight oil market this year.

Consultants FGE said that available data so far this year has shown a large counter seasonal fall in crude and fuel stocks of almost 29 million barrels, compared with a typical average