Brent has started August below $100/bbl, with OPEC+ agreeing a tiny quota increase of 100,000 b/d, while US commercial inventories built, supported by SPR releases
We forecast global demand growth of 2.21 million b/d for 2022 (-120,000 b/d on previous), which would keep demand below 2019 levels for another year
Slowing global economic growth due to high inflation and high energy prices is hampering oil demand, with US and China seeing softer demand growth
We forecast global supply growth of 3.73 million b/d in 2022 (+250,000 b/d on previous), after the return of Libyan output to 1.2 million b/d and Russia’s current production recovery
Russian total oil production has reportedly recovered to 10.72 million b/d in July. While the EU has made transactions with Rosneft marginally easier, fuller sanctions will arrive YE22
OPEC+ are still cautious about increasing supplies, as any increase requires a delicate renegotiation of the deal and Saudi Arabia remains unwilling to tap limited spare capacity
Cuts on the OPEC side are now fully unwound, with production back to February 2020 levels
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