Petroleum Futures Trading Green, Cautious Optimism for a Bullish 2025

American petroleum futures are trading just on the green side of flat this morning after the International Energy Agency published their monthly Oil Market Report this morning featuring a bullish, if tempered, global oil demand estimate for 2025. The Agency is anticipating Asian countries, particularly China on the tail of its economic stimulus announced earlier this week, to be the drivers of next year’s demand growth from 840 thousand to 1.1million barrels per day.

The Department of Energy’s weekly inventory report showed a 1.4 million barrel drop in national crude oil inventories last week, despite the US set another all-time record in production. The Strategic Petroleum Reserve stockpiles continued to grow last week, up just over 40 million barrels YOY. Deliveries to the US back-up oil plan will continue to trickle in over the next few months, but there are no new purchases on the horizon as the funds set aside for the refills have dried up.

Refined product stocks built in (nearly) all PADDs last week, which matches the increase in refinery runs we’ve over the past month. That might be coming to an end though: throughput rates dropped across the nation last week as refiners are either preparing for the seasonal drop in demand or crying uncle from weak refining margins, likely a little bit of both.

Despite the build in gasoline stocks, inventory levels are still hanging down around the bottom of its five-year seasonal range. We’re likely to see that rise over the next couple of months as we all settle in for the winter, but its yet to be seen how much the refiners’ winter preparations will drag on inventories.