Source: Bloomberg, Unigestion, as of 30.09.2021.
Crude oil is the energy asset class with the largest impact on the consumer and the economy, central to many industries and the world’s most important energy source. Its supply/demand balance is therefore central to the recent rally. Following the reopening of world economies post pandemic, oil demand has been strong and started to deplete inventories. This can clearly be seen in Department of Energy (DoE) total crude oil inventories, which are now back towards their 2018 lows and down 22% from their pandemic peaks.
The recent hurricane Ida also paralysed the Gulf of Mexico and its oil production, further adding to the bullish rhetoric for oil and gas. Just under 1.5 million barrels of oil and 1.7 billion cubic feet of natural gas come out of the Gulf every day. Although production has restarted, some oil companies have already announced that some of their platforms will not be operational until next year due to the damaged incurred.
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