Here is the problem with EIA's implied weekly demand data. For those of you that read our reports, you know that we are cautious on demand, but while it's lower, it's not this low.

The culprit is in the customs data the EIA uses on a weekly basis to derive product exports. Demand is slightly lower y-o-y, but the issue here is that if product exports are overstated, then it inherently lowers the "implied" demand domestically. That's the reason why when EIA understates exports, implied demand jumps and vice versa.

June data will validate this (8/31)

JPM's move out of financing oil and gas is a really big deal because it's the largest lender in the reserved-based lending facility model.

This credit line is what allowed US shale to grow at any cost. Companies were incentivized to keep de-risking inventory.

1/n As oil prices kept going up, PDP reserve values increased, and banks saw a higher margin of cushion. This virtuous cycle continued even through the 2016 oil price crash.

And it wasn't until the Saudi price war 2.0 of 2020 and COVID that made the banks change their view.

2/n

We know people are going to say it's the EIA DPR, but here are some incredible charts illustrating the US shale slowdown story.

#OOTT Estimated 2020 using ~12.2k well completions.