Back in glut

“Oil’s Stunning Reversal”. “A Sudden Glut”. “Oil surplus”. These are some of the headlines from last week that legacy media fired off in quick succession, almost as if they were chomping at the bit to start talking about a glut after three months of being forced by circumstances to not talk about a glut. And that’s just the start, which makes the prospect of a potential re-reversal all the more unpleasant, hypothetically, of course.

First it was record U.S. oil production (and never mind that it can’t cover all lost Middle East supply). Then it was record UAE exports (and never mind that the UAE, like everyone else in the Gulf, had tonnes of oil sitting in tanks.) Then it was OPEC, raising its output quotas again. But even before that it was “Wave of Persian Gulf oil set to swamp Asian refiners when ships sail out of Strait of Hormuz”, which tells you just how serious an organisation Bloomberg is when it comes to factual reporting.

We’re talking about the same Asian refiners that have been struggling to keep their refineries going — reportedly, of course — with their governments releasing oil from storage and buying at exorbitant premiums. Yeah, swamped. And they won’t be alone, apparently, if we are to believe JP Morgan’s head of global commodities strategy, who believes that “The surge in oil supply is about to collide with a market that, at least for now, simply does not need it.” Welcome to another trip to Manufactured Reality.