IEA: onshore oil stocks fell 113M barrels in September, near lowest since 2016
In brief
- IEA estimated onshore oil inventories fell 113 million barrels in September.
- Oil on water rose 103 million barrels, so observed inventories fell only 10 million.
- Fed's Beige Book cited elevated diesel prices and fuel surcharges lifting business costs.
- EIA put US on-highway diesel at $6.179 a gallon, $2.514 above a year earlier.
- CryptoSlate said persistent energy inflation could delay easier US financing, affecting Bitcoin.
Oil moved to sea, not to land
The headline number isn't the whole picture. Global observed inventories fell by only 10 million barrels, the IEA said, because oil on water rose by 103 million barrels over the same month.
The agency linked that waterborne build to recovering Gulf exports. Gulf crude shipments reached 13.9 million barrels a day in September (more than 75% of pre-war levels), per the IEA.
So the barrels exist. They just aren't sitting in onshore tanks.
The IEA also said record tanker rates raised crude delivery costs and squeezed refinery margins in Europe and Asia.
Diesel costs are reaching businesses
The Federal Reserve's October 14 Beige Book described how that's feeding through. Business contacts reported elevated diesel prices and fuel surcharges passing higher costs along supply chains, though those observations were collected on or before October 5. Consumer-facing firms reported resistance to price increases and squeezed margins, which limited how much they could pass on.
The US Energy Information Administration's October 14 release put US on-highway diesel at $6.179 a gallon on October 12. That's down 2 cents from October 5 but $2.514 above a year earlier.
What CryptoSlate sees for Bitcoin
This is where the crypto angle comes in. CryptoSlate's analysis said persistent energy inflation could delay easier US financing and limit investors' appetite for risky assets, which would affect Bitcoin. The Fed announced a quarter-point increase in its target range to 3.75%–4% on September 16, effective September 17.
There's research behind the risk-appetite link, too. The authors of an August 2023 IMF working paper found that Fed tightening weighed on a historical measure of crypto prices by reducing investors' appetite for risk.
The New York Fed's SOFR benchmark was 3.88% on October 14, within a 3.87%–3.89% range across the five latest observations available on October 16. SOFR measures secured overnight dollar lending, though (it's separate from Bitcoin derivatives funding).
Can recovering exports refill those land-based tanks fast enough? CryptoSlate said that's the next test: whether they rebuild onshore stocks and cut freight and fuel surcharges enough for supply relief to reach businesses.
Frequently asked questions
Why did onshore oil stocks fall so much while global inventories barely changed?
The IEA estimated onshore inventories fell 113 million barrels in September, but oil on water rose 103 million barrels. That left global observed inventories down only 10 million barrels. The IEA linked the build-up at sea to recovering Gulf exports.
How could oil prices affect Bitcoin, according to CryptoSlate?
CryptoSlate's analysis said persistent energy inflation could delay easier US financing and limit investors' appetite for risky assets, which would affect Bitcoin. An August 2023 IMF working paper found that Fed tightening weighed on a historical measure of crypto prices by reducing risk appetite.
