Oil Watch: September data weakness was fake news. Time to buy oil?
The latest EIA report once again shows that September was just a data glimpse, and that oil demand is still going relatively strong in the US. Long oil a bet for the last month of 2023?
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Welcome back to our weekly EIA report, where we run through demand and supply data and give our cents on where we are heading next – and what the implications are for energy markets.
As always we present the main conclusions up-front:
1) Oil demand will likely come in hot in November on the back of strong gasoline demand in October due to the lags in energy markets (Gasoline leads oil – not the other way around).
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September’s implied demand data took markets by storm with a print way lower than what one would normally expect in September, but as we rightfully forecasted back then, it was not at all in line with high-frequency data, which has become clear as day in this week’s report. Implied demand for gasoline jumped 18,3% compared to last month, while implied demand for diesel and oil keeps dropping (on a NSA basis).
Our full decomposition of the EIA gasoline demand below.
Find the whole study here → https://stenoresearch.com/watch-series/eia-watch-september-weakness-was-fake-news-time-to-buy-oil/ to get an understand of why the September data was “fake news” from the EIA.
Chart 1: Big rebound in implied oil Gasoline demand