Three and a half months after the closure of the Strait of Hormuz stripped 13 million barrels a day from global supply, oil is still trading below $100. The durability of that ceiling has less to do with fundamentals and more to do with three emergency stopgaps that are, one by one, giving out.
China slashed crude imports to multi-year lows. The U.S. flooded export markets at a record pace. Developed economies released strategic petroleum reserves in coordinated waves. Together, they absorbed a supply shock that by rights should have sent prices toward the stratosphere.
Now the buffers are failing, and analysts say the market is perhaps a few weeks from an inflexion point.
“From an inventory perspective, we believe that the end of July could be an inflexion point for the market if there is no improvement in energy flows from the Persian Gulf,” Warren Patterson, head of commodities
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