00:00Dan Streuven of Goldman Sachs writing, global visible oil inventories are likely to reach record low levels, even in an
00:06optimistic scenario where flows start to recover by the end of April.
00:11Dan joins us now for more. Dan, good morning. Good morning. Thanks for having me.
00:14You can see how things are set up. You've got visibility of the tankers that have arrived and the ones
00:18that aren't coming anymore.
00:20Can you describe what the next two months is going to look like?
00:23Yes. So global visible oil inventories, I would say fortunately for the world, were at pretty high levels before the
00:30war started.
00:31But the pace of global inventory drawdowns is just so sharp, around 11 million barrels per day or so, that
00:38because of the bottlenecks and the logistic supply chain time it will take for the system to reset,
00:47that even if we start recovering flows by the end of April, we're on track to reach the lowest level
00:52for global visible oil inventories.
00:54You know, even if flows start to recover by the end of the month.
00:58And we honestly, we just have never seen how oil prices react at such low, low levels.
01:03So we have to recognize that that implies some some upside risks to our to our forecast, which which are
01:09based on historical data.
01:10Does that aggressive drawdown in inventories explain why something like, say, dated Brent is some $40 off the highs?
01:16Yes. So the dated Brent is still, you know, $10, $15 higher than the June futures contract.
01:24The main reason is there's a big premium on getting oil sooner rather than later.
01:29The June Brent futures contract gives you the right to get oil in June.
01:32Dated Brent gives you the right to get a cargo in the next 10 to 30, 30 days.
01:37And because some market participants assume a high probability that by June things will have normalized,
01:43you have this big immediate supremum on barrels now rather than later.
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