Sep 4, 2026 · 24 min · 10 segments
Enverus Intelligence host Gibson Scott sits down with Al Salazar, director of macro research, and Josephine Mills, senior macro research analyst, to break down this month's Fundamental Edge report…
Gibson ScottHost
Josie MillsGuest
Interesting to see, I mean, talking about the demand destruction, interesting to see the demand going back to oil.
But in China, right, we actually saw emissions and crude usage go down, potentially offsetting some of the declines in supply, obviously, that they've seen from the Hormuz closure.
I think that if one thing comes out of this shock is that we may have accelerated and brought back to life the peak demand discussion.
There was already a discussion about peak demand in China having passed already.
They had been building stocks though, right? Like how much of it is just drawing down that stock surplus? Part of it's that.
But, you know, looking at refining runs and overall activity, they should have, you know, demand should have fell off a little bit more, right? That said, I think they've been able to shift some of the refineries to, you know, produce more gasoline and diesel as opposed to pet chem and kind of played a little bit of that game.
That said, you know, from a top down perspective, one thing I would like to say is that we had the SPR draw, right? We had the MOU release barrels into the market, right? Um, we had all the backstops necessary in order to prevent a catastrophic price spike, right? But here we are today, we're still drawing the SPR is about to you know, fizzle in probably about a month or two or here.
And ultimately, demand is the one that's going to bring this market back to some type of balance.
And some green shoots that that's even possible based on what we're seeing out of China, which is pretty interesting from them.
Interesting to see, I mean, talking about the demand destruction, interesting to see the demand going back to oil.
But in China, right, we actually saw emissions and crude usage go down, potentially offsetting some of the declines in supply, obviously, that they've seen from the Hormuz closure.
I think that if one thing comes out of this shock is that we may have accelerated and brought back to life the peak demand discussion.
There was already a discussion about peak demand in China having passed already.
They had been building stocks though, right? Like how much of it is just drawing down that stock surplus? Part of it's that.
But, you know, looking at refining runs and overall activity, they should have, you know, demand should have fell off a little bit more, right? That said, I think they've been able to shift some of the refineries to, you know, produce more gasoline and diesel as opposed to pet chem and kind of played a little bit of that game.
That said, you know, from a top down perspective, one thing I would like to say is that we had the SPR draw, right? We had the MOU release barrels into the market, right? Um, we had all the backstops necessary in order to prevent a catastrophic price spike, right? But here we are today, we're still drawing the SPR is about to you know, fizzle in probably about a month or two or here.
And ultimately, demand is the one that's going to bring this market back to some type of balance.
And some green shoots that that's even possible based on what we're seeing out of China, which is pretty interesting from them.
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