- Brent rose to c. $44/bbl in July, with OPEC+ applying compensatory cuts to the second phase of its deal and the EU agreeing a €750 billion stimulus package
- The Brent futures spread has narrowed as IHS data shows seaborne storage is now drawing down
- We see Brent averaging $39.53/bbl in 2020 and $51.34/bbl in 2021 (+$3.98/bbl and unchanged on previous, respectively), as market sentiment, reflected by futures prices, improves
- Our global demand growth forecast for 2020 is broadly unchanged at -7.77 million b/d (+10,000 b/d on previous), with jet fuel demand expected to lag for at least two years by some airlines
- A second pandemic wave remains a demand risk, as countermeasures inevitably bear economic costs despite a potentially improved policy response from governments
- Our global supply growth forecast for 2020 is -6.93 million b/d in 2020 (-60,000 b/d on previous), taking into account slightly deeper OPEC+ cuts in August and September
- This would leave global inventories building by 450,000 b/d in 2020 on average, though this belies the scale of the build due to timing mismatches
by Graham Walker // 24 July, 2020
← Back to Blog