Global stockpiles of crude oil and products are being drawn down at a record pace this month as the war in the Middle East drags on, curtailing supplies, according to Goldman Sachs Group Inc.
Visible inventories shrank by a record 8.7 million barrels a day so far in May, almost double the average pace since the conflict began, which is the highest ever, the investment bank’s analysts said.
“Physical markets continue to tighten, as estimated oil exports through the strait remain at a very low 5% of normal,” they said.
Global energy markets have been upended by the conflict, which has led to an unprecedented supply shock. That’s spurred the rapid drawdown of holdings accumulated before the crisis, while governments have also coordinated releases from strategic reserves in a bid to rein in price gains.
About two-thirds of the draws in May were driven by a drop in so-called oil on water, with declines in exports outpacing weaker imports.
