- 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
- We se...
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by Graham Walker // 4 August, 2022
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