OPEC+ cuts and strong demand raise prices since July. Brent crude averaged $85/bbl in July.
The potential for escalation in the Russia-Ukraine conflict and US inventory draws falling below the 5-year average contributing to the upward price movement
Concerns over weaker Chinese economy adding uncertainty to demand and downward pressure on prices
Anticipated growth in demand for this year is around 2.16 mb/d, with China being a major contributor at 1.5 mb/d, driven by petrochemical expansion
Saudi’s extended production cut to September creates a 2023 global supply deficit of 890,000 b/d. Deficit continues into 2024 with lower levels if OPEC’s current policies unchanged
Tight market prompts EIA’s revision of Brent price forecasts: $82.62/bbl for 2023, $86.48/bbl for 2024.
Ongoing negotiations are underway for the Turkey-Iraqi pipeline with a capacity of 450,000 b/d. Reinstating this pipeline potentially ease supply constraints and impact prices
India seeks alternatives to Russian oil due to pricing above G7 ceiling
Majors’ capex up 22% in 1H23, but reduced free cashflow likely to limiting spending next year
The UK’s oil and gas policy shift requires clear tax incentives to drive activity, while operators caution persists over potential policy changes post 2025 election
