Monday Macro View: How does Frac Job Count explain the divergence between global and U.S. inventories?

There’s been no shortage of confusion around oil markets this year. Depending on who you follow, inventories are either ballooning or vanishing. OPEC+ recently increased their production by 582,000 bpd citing low inventories as one of the reasons. Prices, however, do not correspond to such tightening - if there is any. The most important issue is that there is a divergence between inventories when it comes to the U.S. and the world. So, we decided to break it down for our readers and use our Frac Job Count to explain why inventories are low in the U.S. while rising globally.

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Let’s lay it out plainly: global inventories have been rising all year — but not everywhere, and not in the same way.

Start with the big picture. According to both Kpler and OilX, global crude and product stocks are significantly higher in 2025 compared to last year . Kpler pegs the YTD build at over 270 million barrels. OilX isn’t far behind. That’s massive, and it’s the kind of buildup you’d normally associate with weak demand or oversupply — or both.

And yet, zoom in on the U.S., and the story gets messier. Latest data from the EIA shows a 9.4 million barrel net build in total U.S. petroleum inventories (excluding the SPR) for the week ending June 27. Crude itself rose 4.1 million barrels to 821.7 million. Gasoline added another 4.2 million. But dig a little deeper, and you'll see that Cushing stocks dropped sharply (down 1.5 million barrels), and distillate inventories fell by 1.7 million — a sign that product demand is alive and well domestically. When we look at the moving averages that also show that inventories are down overall.

Source: HFI Research

So how can inventories be climbing globally while drawing down in key parts of the U.S.? Three things.

First, the buildup is happening elsewhere , especially in Asia and parts of Europe. According to Vortexa, China has been stockpiling crude at full throttle since April. Sinopec, in particular, has been loading up aggressively. Add in teapot refiners in Shandong, and you’ve got a big driver of the global stockpile surge. This wasn’t just opportunistic buying either — much of it was driven by fear of Middle East conflict escalation and anticipation of Iranian supply disruptions. Turns out, none of that disruption happened. A U.S.-brokered ceasefire kept oil flowing through the Strait of Hormuz. And all that precautionary buying is now sitting in tanks.

Second, OPEC+ exports have quietly ramped back up. Saudi Arabia alone raised exports by 450,000 barrels per day in June . At the same time, global demand hasn’t done anything dramatic. It’s up a bit from last year, but still trending in line with seasonal norms — nothing that would absorb those builds.

Thirdly the reason that U.S. inventories haven’t mirrored the global build is because shale producers aren’t pushing out new supply. Primary Vision’s Frac Job Count came out at 204 recently, barely different from this time last year. The 30-day moving average is tracking flat, and forward projections through mid-Q3 show no material lift. Operator-level data from the Frac Operator Monitor reinforces the picture — top names like EOG, Pioneer, and Devon are running steady programs, with no signs of accelerating. That restraint is showing up in inventory numbers. In past cycles, rising global inventories were often amplified by a U.S. shale response — more completions, more production, more builds. This time, the opposite’s happening: the only reason U.S. crude inventories aren’t rising in line with global trends is because domestic supply isn’t expanding. The discipline in the field is acting like a cap on U.S. stock growth.

This divergence is now being reflected in market behavior. U.S. stocks have tightened through June, which helped support prices locally. But the global backdrop — especially those bulging Chinese and European inventories — has kept any rally in check. Brent ran up to $77 on war fears, but gave most of it back just as quickly.

Now the market’s stuck between two realities. One: physical crude is piling up in places like China. Two: Non opec production continues to grow. And three: with prices hovering below $70 and spare capacity in the system, any bullish momentum needs real demand growth — not just geopolitical noise.

Refined products

Refined product inventories tell a different story from crude. While crude stocks have been building globally, product stocks have been quietly tightening. According to the IEA, OECD refined product inventories fell by 19.2 million barrels in April 2025 alone, even as crude stocks rose by over 32 million barrels. JPMorgan analysts estimated that refined product inventories dropped by about 50 million barrels between January and May this year, showing that fuel markets are drawing even while crude accumulates. This isn’t just about paper balances— ARA inventories for gasoline, jet fuel, and fuel oil have fallen to their lowest levels since early 2024 , down 3% week-on-week to 5.34 million tonnes. Jet fuel dropped by 11% in one week. These are the kinds of numbers that show real tightness on the downstream side of the barrel.

Refinery runs are not sitting idle either. Global refining throughput in 2025 has been higher than in 2023 and 2024, especially during the summer demand window. IEA data shows throughput averaging above 84 million barrels per day in the third quarter , close to pre-pandemic highs. There was a dip heading into the autumn, likely seasonal maintenance, but the general level of refinery activity has been robust. In simple terms, demand for fuels is stronger than what the system is putting out. That tightness downstream helps explain why refining margins have remained strong even as crude prices have slipped.

So while the crude side of the system is long and growing, the product side remains short and tight. This disconnect between rising crude inventories and falling product inventories isn’t a contradiction—it’s a signal that the oil market isn’t oversupplied everywhere. It’s oversupplied upstream and tight downstream. That makes OPEC+’s framing of “tight inventories” technically true in one part of the system, but misleading when used to justify more crude supply.