Global oil inventories are falling rapidly and are now close to their lowest level in about eight years, raising concerns about potential supply shocks, according to analysis from Goldman Sachs.
The bank says total global oil stocks have dropped to around 101 days of expected demand, the lowest in nearly a decade.
This information was reported by Reuters.
It warned that if access through the Strait of Hormuz remains disrupted, inventories could fall further to about 98 days of demand by the end of May.
Although a record low is not expected, Goldman Sachs said the speed at which global oil reserves are being used is worrying for the market.
The bank noted that “while global oil stocks are “unlikely to hit minimum operational levels this summer, the speed of depletion and supply losses in some regions and products is concerning,” the analysts wrote in the note.”
It added that refined fuel stocks are tightening even faster, falling from about 50 days of demand before the Middle East conflict to around 45 days now.
According to the report, easily accessible fuel reserves are now nearing very low levels.
Rising tensions in the Strait of Hormuz are also adding pressure.
The report says efforts to secure safe passage for ships continue while risks of disruption remain high, as instability in the region persists.
Market reactions have already begun. Oil and gas prices rose again on Monday as traders reassessed the likelihood of prolonged supply disruptions, according to energy analysts at ING.
