- Brent rose to c. $41/bbl in June as OPEC+ extended the higher cut level of 9.7 million b/d for another month to July and posted firm compliance data
- Saudi Arabia continues to take a hard line against supposed "cheaters", though Russia gets a free pass despite missing its target by the same volume as less powerful producers, risking group cohesion
- We see Brent averaging $35.36/bbl in 2020 and $51.34/bbl in 2021 (+$0.87/bbl and unchanged on previous, respectively), though our 2021 forecast faces downside risks from a resurgence of COVID-19
- Our global demand growth forecast for 2020 is cut as the OECD downgrades its outlook and the threat of a second wave of infections increases
- US crude inventory draws have stalled in recent weeks, suggestive of a relatively weak recovery so far, but the rate of inventory build has also slowed substantially
- Concerns over the potential for further outbreaks in China centred around Beijing see us lower forecasted demand growth there
- Our global supply growth forecast for 2020 is raised marginally as LTO data suggests a slightly less deep nadir in production
- We see US...
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by Graham Walker // 26 June, 2020
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