I bet you’ve been just itching to see this post! EIA inventory data?! Be still my beating heart! Mr. Hot take, you are too much! Arcane. Yes. But like the DUCs, telling.

Yesterday, we saw another 6.9 mmbo crude oil draw which surprised analysts. But it shouldn’t. Since June 7, the US has dropped oil inventory by almost 900 mbo/d. Per day! Seasonality be damned – 65 mmbo draw in 3 months is a lot.

The last time we were at this absolute inventory level – oil was $65/bbl and we haven’t seen this magnitude of drawdown WOW since ‘17 when US production was 2.5 mmbo/d lower. Add to that that imports are 1 mmbo/d lower and exports 1 mmbo/d higher and one MUST ask – where is all the oil going? (You must, I insist!)

Demand? Maybe. But in this series I’ve made the case from Dec ‘18 to May ‘19, production didn’t grow that much. Whilst at the highest rate of completions since ‘14, Mar- June saw a 40 mmbo build in inventories. And then, it reversed and reversed hard. Epic is only 2 mmbo of line fill- so that can’t be it. What then?

Tune in tomorrow for the final part of the series where it all comes together. Parent-child/cousin has led to the highest decline rates ever. And that means, peak oil in the US.