Jeff Currie, Chief Strategy Officer at Carlyle Group, has declared that the global oil market's "illusion of abundance" has vanished, warning that the market has rapidly transitioned from a standard supply deficit into a structural energy shortage:
According to the former head of commodities research at Goldman Sachs, the real signal of a market deficit comes from refined product markets, where crack spreads have skyrocketed to an unprecedented $70 a barrel:
Currie says the perception of an oil glut was temporarily created by large inventory drawdowns from the Strategic Petroleum Reserves of 32 IEA members, including the release of 172 million barrels of crude from the U.S. SPR:
The fragile supply balance has been further exacerbated by various systemic bottlenecks, with the lack of sufficient buffers to absorb the supply shocks putting oil markets in a precarious position:
The IEA has warned that global oil inventories are on track to plunge to historical lows due to an unprecedented supply shock ahead of the Northern Hemisphere’s peak summer driving and flying season:
