- Brent has averaged $42.14/bbl in September, down c. $3/bbl against August, with a second wave of infections rising in Europe raising concerns over demand as countries consider a second lockdown
- We see Brent averaging $42.06/bbl in 2020 and $50.03/bbl in 2021 (+$0.25/bbl and -$1.02/bbl on previous, respectively)
- Our global demand growth forecast for 2020 is revised down to -8.22 million b/d (-250,000 b/d on previous)
- Chinese demand has been relatively strong, with the country apparently relatively well recovered from the pandemic, but some of this is due to stockpiling which will ease in the coming months
- Our global supply growth forecast for 2020 is raised to -6.52 million b/d in 2020 (+180,000 b/d on previous) as a breakthrough in the Libyan civil war sees ports reopen and production resume
- Some paused offshore projects are already starting to return, while offshore activity generally should pick up from 2Q 2021
- This would leave global inventories building by 1.110 million b/d in 2020 on average (+440,000 b/d on previous) and drawing at a rate of just 230,000 b/d in 2021, which would likely cap prices
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by Graham Walker // 30 September, 2020
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