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Oil Market Snapshot – February 2023

  • Brent is trading c. $82/bbl, up $2/bbl m-o-m, with agencies raising their expectations of global GDP growth as inflation eases, the US remains robust, and China reopens
  • We see global demand growth of 1.53 million b/d in 2023 (+90,000 b/d on previous), driven by non-OECD growth, reflecting the improving economic outlook
  • Indian demand has remained strong, while we see China once again driving global demand as the year wears on
  • We forecast global production growth of 1.2 million b/d in 2023 (-430,000 b/d on previous forecast) with the majority coming from outside OPEC
  • OPEC adds just 270,000 b/d in 2023 if policies remain the same, down from 2.58 million b/d in 2022 when the 2020 cuts deal was unwound
  • The latest OPEC+ meeting left quotas unchanged, and the next will be in two months
  • Oil majors posted record profits in 2022, with shareholder returns top priority
  • We expect Russia’s crude sanctions losses to be limited to 900,000 b/d, with the price cap and sanctions broadly effective, though Russia will be able to claw back some lost revenue
  • We see inventories drawing 90,000 b/d ...

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by Graham Walker // 2 February, 2023

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