Publications: Notes at the Margin

The Inventory Question (June 8, 2026)

 

In our June 4 Substack post, we asked, “Are Markets Delusional?”[i] We based the question on a comment by consultant Robert McNally, who stated on June 2, “After a moment of panic, the market settled into a delusional expectation it’s all going to end soon.”[ii]

 

Those who buy, sell, refine, explore, or develop oil can be excused for being befuddled. To make profitable decisions, they need good information. Some require it just to stay in business. What should they believe?

 

Unfortunately, it is impossible to offer a definitive answer for several reasons. This inability begins with a fundamental problem: there is no agreement regarding how much supply has been lost. 

 

In this report, we offer our attempt to sort through the uncertainties. Our tentative conclusion is that the disruption has been, and will continue to be, moderated by China and by consumption cuts.

 

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