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Oil Market Snapshot – January 2023

  • The year begins with Brent dipping below $80/bbl, as recession fears continue and China’s abandonment of “zero COVID” has led to a wave of infections and hospitalisations
  • With the Russian invasion of Ukraine ongoing and global energy markets are still reacting, volatility remains likely in the year ahead, though perhaps less intense than in 2022
  • We see global demand growth of 2.19 million b/d in 2022 (unchanged on previous)
  • For 2023, we forecast demand growth of 1.44 million b/d (+50,000 b/d), lower than that in 2022 as high energy prices impacting economy and weakening demand
  • We peg 2022’s global production growth at 4.03 million b/d (-10,000 b/d on previous) based on revisions to OPEC+ output and maintenance losses in Canada, Kazakhstan and Norway
  • Global production growth falls to 1.63 million b/d in 2023 (+220,000 b/d on previous) with the majority coming from outside OPEC and Russian losses limited to 900,000 b/d
  • We see inventories building 110,000 b/d on average in 2022 (-10,000 on previous), and 300,000 b/d in 2023 (+160,000 b/d on previous)

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by Graham Walker // 6 January, 2023

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