US crude oil demand surges as traders prepare for OPEC+ pricing war
The Tank Tiger storage broker reported that the demand for crude oil in the United States has risen in recent weeks, to a level similar to the COVID-19 epidemic. This is as traders prepare to receive a surge in supply from the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the coming months.
OPEC+ has agreed to increase oil production for a second month in a row, June. The group is looking to punish members who are overproducing. OPEC leaders also plan to increase oil production in July. This could return up to 2.2 million barrels per day (bpd), according earlier reports.
The OPEC+'s supply increases are a secondary goal to regain market share from U.S. producers who have been able to increase their output to record levels over the past few years, while the OPEC+ has made deep cuts in supply.
Brent crude futures fell last month to a 4-year low of $58,40 a barrel amid fears that a surge in OPEC+ production could coincide with a slowdown in the global economy caused by President Donald Trump's tariff war.
The Tank Tiger's chief operating officer, Steven Barsamian said that the falling prices were a warning to traders to stock up on oil until prices recovered. This is especially true as market structure indicates a glut in supply next year.
Barsamian stated that the demand for crude oil storage on The Tank Tiger platform had almost doubled since May, reaching 3 million barrels in June. Storage tanks are in demand across the United States, especially at major trading hubs such as those located along the Gulf Coast and Midwest.
Barsamian stated that "we haven't seen such a spike in demand for crude storage since the COVID-19 Pandemic."
The number of new requests for storage in June has slowed down over the last few weeks, as the market improved slightly due to signs of progress on U.S. Trade Talks. However, this only moved the requests out further on the calendar.
Barsamian’s team is currently working on a request for storage of crude oil at the Cushing, Oklahoma hub in January next year, a lead time that is unusually long, he explained.
He added, "It shows the negative market sentiment if we get a request so far in advance."
The U.S. Energy Information Administration reports that crude oil stocks in the United States have unexpectedly risen over the last two weeks. They now total 443.2 million barrels - the highest level since July 2024.
(source: Reuters)
