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Energy Business
Alexander Fernandez
Alexander Fernandez
 · Posted in Energy Business

OECD Oil Stocks Dip Again in February: Product Draws Lead the Decline

OECD Oil Inventories Continue to Tighten in February 2025: Regional Divergences and Product Stock Weakness Stand Out

Key Insights:

  1. Persistent Stock Tightness: OECD commercial oil inventories declined by 16.1 million barrels (mb) in February 2025, maintaining a trend of sub-average stock levels. Inventories now sit 71 mb below the five-year average and 173.5 mb under pre-COVID norms (2015–2019), indicating sustained market tightness.

  2. Crude vs. Product Divergence: While crude oil stocks rose slightly (+11.1 mb), a steep draw in product inventories (-27.3 mb) pulled total stocks lower. This signals a potential imbalance between upstream supply and downstream refining and distribution, which could influence both margins and future crude runs.

  3. Regional Contrasts:

    • OECD Americas saw a notable crude build (+15 mb), but product draws (-24.8 mb) dominated.

    • OECD Europe experienced a modest product stock increase (+2.9 mb) despite a crude draw (-5.2 mb).

    • OECD Asia Pacific posted minor crude gains but significant product declines, reflecting varying seasonal and structural market factors.

  4. Forward Cover Continues to Slide: The forward demand cover fell to 60.9 days, down from the previous month and well below the five-year average. This metric remains a key indicator of market resilience and highlights ongoing vulnerability in supply-demand balances.

  5. Implications for Q2: With product inventories well below seasonal norms and forward cover weakening, refinery behavior, geopolitical risks, and demand trajectories will be critical to watch. The divergence between crude supply and product availability may drive price volatility and challenge storage logistics in the months ahead.

Conclusion:
February’s data reiterates a crucial theme: global oil market fundamentals remain tight, and the burden is increasingly shifting to the downstream segment. As we move into Q2 2025, stakeholders should monitor not just crude supply but also refining margins, turnaround schedules, and transport fuel demand—each playing a pivotal role in shaping the next phase of oil market dynamics.