Brent is trading c. $69/bbl, with traders focussed on the relative firmness of OECD demand- We increase our Brent annual average forecast to $64.23/bbl in 2021 (+$0.38/bbl on previous) on this basis, though risks to demand remain
- Our 2021 demand growth forecast falls slightly to +5.74 million b/d (-290,000 b/d on previous), as we downgrade the outlook for India due to COVID
- New daily cases in India appear to have topped out at c. 400,000 b/d, but the country will continue to struggle for a while yet
- Different variants pose a risk to OECD demand, as many countries are relaxing restrictions
- Progress on a revival to the Iranian nuclear deal means a lifting of US sanctions could occur soon, allowing c. 500,000 b/d of exports from storage back on the market, but production will lag
- We decrease our 2021 supply growth forecast to 2.97 million b/d (-150,000 b/d on previous), with capex limited and a disciplined OPEC+ cuts taper currently expected
- This lower spending has improved most operators margins, but at the expense of production
- We see the market in deficit by 640,000 b/d in 2...
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by Graham Walker // 1 June, 2021
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