Oil Tightness Masks Deferred Supply Choice in Global Markets

The global oil and gas sector is experiencing physical tightness despite deferred supply choice. Over the past week, US crude inventories increased across most regions, with Cushing stocks rebounding above 20 million barrels due to strong Canadian imports.

Record diesel exports depleted distillate inventories to their lowest seasonal level since 1996, while gasoline production remained at a 2020-era seasonal low amid subdued summer driving demand.

The Caspian Pipeline Consortium (CPC) transports oil from Kazakhstan's Tengiz and other fields, as well as some Russian crude, to the Black Sea export terminal near Novorossiysk, Russia. Disruptions at this terminal would significantly impact international crude markets.