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Oil Market Snapshot – March 2022

  • Brent is trading around $114/bbl at the end of the most volatile month in the contract's history. The last thirty days have seen prices as high as $139/bbl and below $100/bbl
  • The extreme volatility sees us suspend our price forecast. The EIA forecasts an average price of $105.05/bbl for 2022 (+$22.09/bbl on previous)
  • We forecast global demand growth of 2.94 million b/d for 2022 (-610,000 b/d on previous), lowered as a result of lockdowns in China and the prospect economic turmoil from the war
  • This leaves global annual average demand below 2019's level for a third year, with inflation still a downside risk as OECD nations indiscriminately cut fuel taxes, supporting demand
  • We forecast global supply growth of 4.68 million b/d in 2022 (-1.13 million b/d on previous), with around half the change due to lost Russian production
  • Though sanctions will not end if the war does, self-sanctioning may be reduced from its current levels
  • The meeting of March 31st is again likely to see no change to the OPEC+ schedule, with the key Gulf members stating their support for keeping Russia in the group
  • So far...

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by Graham Walker // 30 March, 2022

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