Oil Market Snapshot – November 2020 Brent Rebounds in November as Vaccine News Dominates

Brent has hit $48bbl this week and averaged $42.42/bbl in November so far, up c. $2.23/bbl against October, as positive vaccine news fuels optimism for future oil demand
Buying of contracts further out in the futures curve has dragged spot prices higher even as many OECD nations face tighter economic restrictions due to increasing COVID-19 cases
We see Brent averaging $41.23/bbl in 2020 and $48.27/bbl in 2021 (-$0.48/bbl and -$1.76/bbl, respectively), down from October on the potential for disappointing economic news
Our global demand growth forecast for 2020 decreases to -9.06 million b/d (-550,000 b/d on previous) due to lost economic activity from further lockdown measures
Our global supply growth forecast for 2020 decreases to -6.61 million b/d in 2020 (-10,000 b/d on previous) due to some delays in non-OPEC output
We see an overall stock build of c. 563 million bbl in 2020, led by stockpiling in China in the early part of the year
The narrow nature of Biden's win in the US presidential election suggests that, contrary to consensus expectations, an already cautious centrist candidate is unlikely to pursue a radical green agenda
Saudi Arabia appears to have reversed its hawkish position on compliance, as discontent grows amongst OPEC+ members ahead of a crucial meeting aimed at rolling over existing targets
A substantial global economic recovery should not be expected before a global vaccination programme is underway (2H 2021)

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