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Chart of the Day: China’s Oil Inventories Lowest in 15 Months

Summary

China’s oil inventories have been declining for weeks as shown in Figure (1) above. Now they are at their lowest level in 15 months. 

EOA’s Main Takeaways

This is a typical Chinese behavior. Commercial and strategic inventories are released when prices rise above $75/b. However, no one can deny the impact of the Houthi attacks on ships on China’s oil inventories, but we believe the impact is limited. 

The decline in Chinese oil inventories is NOT bullish. China is releasing oil from inventories to prevent oil prices from rising. That is not the case in OECD inventories.

To avoid the bias of exaggerating the decline in Figure (1) above, we post figure (2), which starts from zero.