Stupid question about invenories

Stupid question about invenories

Can anyone explain to me why the 5-year average (for inventories) is considered so important?

Say (n)OPEC extends the cuts till the end of 2017 and inventories come in line with the 5-year average. So what? First of all, the 5-year has been moving up steadily for a while now, so it's not really such a great indicator of a pre-glut world, is it? Second, once the cuts expire, it brings 1,8 million bbl back to the market, which means inventories immediately begin to rise again…

So, what difference does it make if we reach the 5-year or not?

Submitted May 04, 2017 at 02:44PM by U5K0
via reddit


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