Saudi Arabia and Russia hope to win back market share from US shale oil producers
May 21, 2025
The average estimates for the DOE inventory report today from the Bloomberg Survey is for crude oil inventories to be down 652,000 barrels, gasoline inventories down 878,000 barrels and distillates down 1.738 million barrels.
The API inventory update that came out yesterday called crude oil supplies up 2.5 million barrels, gasoline down 3.2 million barrels, and distillates down 1.4 million barrels.
Energy markets were mixed and lacking any conviction. NYMEX trading volume was low for the day. Refined fuels did close up a bit on the API data release, but crude oil was down just a few cents.
Reuters reports that OPEC+’s plan to ramp up production is to bring overproducing members in line, but they also say Saudi Arabia and Russia also want to win back market share from US shale producers. They claim that US shale producers are more vulnerable this time around more so than ten years ago when technology and drilling helped US producers out. US producers have seen costs rise in the past three years, and their income is declining due to falling global oil prices.
According to a survey by Allinaz Trade, the US tariffs have severely dampened the mood among exporters and 42% of companies now expect their export revenues to decline significantly.
The average estimate for today’s propane inventory update is for supplies to build by 2 million barrels.
The crude oil market will continue to trend sideways amid the uncertainties surrounding the peace talks between Russia and Ukraine and the nuclear negotiations between the US and Iran. The market will take some short-term direction from today’s weekly inventory report.