Brent is trading c. $85/bbl, up $3/bbl m-o-m, with prices volatile above $80/bbl as the market tries to make sense of an array of supply and demand risks
We see global demand growth of 1.77 million b/d in 2023 (+240,000 b/d on previous), with the OECD subdued by inflation as US demand appears to wane slightly in the latest data
China’s reopening once again drives demand growth, but the size and speed still remains uncertain, as does OECD interest rate policy
We forecast global production growth of 1.44 million b/d in 2023 (+240,000 b/d on previous) with the US the main contributor
Brazil, Norway, Canada, Guyana and China all grow, but are balanced by Russia’s estimated 900,000 b/d loss to sanctions and price caps
The threshold for a Saudi response to a price spike appears high after comments by the energy minister, likely requiring intervention from all major consuming nations, i.e., China, the US, the EU
We provisionally see inventories drawing 150,000 b/d on average in 2023 (60,000 b/d larger than previous), but Russian and OPEC+ supply, OECD and Chinese demand are all uncertain
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