The purpose of the project is to provide a ‘snapshot’ of global oil inventories at any given time and to identify whether the global or regional markets are ‘well balanced.’ If not, there may be regional or global surpluses (or shortages) of crude oil supplies and inventories that can trigger a price reaction, and subsequent rebalancing of world oil markets. The objective of this study is to determine what the optimal level of inventories is to rebalance the world’s oil markets. The project aims to answer the following questions:
1) How high do inventories have to be before the world’s oil markets become over-supplied?
2) Are the current levels of inventories so high that there is the risk of another price shock?