Publications: The Petroleum Economics Monthly

Quantitative Easing and the Creation of the World's Oil Sponge (February 2015)


Through arbitrage, the United States is becoming the world’s oil sponge. Global oil supply exceeds global oil use by around two million barrels per day. The excess oil must go into storage. More than half of it seems to be making its way into US tanks or leaving the United States as product exports. At some point, the oil stocks must be sold and the sales will put downward pressure on prices. As we explain in this report, the selloff could be prompted by any one of several events.


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