- Brent is trading c. $71/bbl at the end of November, down $13/bbl from the end of October
- The decline is primarily due to COVID news, both from further lockdowns in Europe and the discovery of the omicron "variant of concern"
- A US-led effort at coordinated stock releases by consumer countries has also had an impact, though relatively uncoordinated
- The collapse has substantially raised the probability of an OPEC+ deviation from its quota schedule, but the December meeting's outcome is still difficult to call
- Our Brent annual average forecast is unchanged at $71.30/bbl in 2021. We see prices rising in 2022 to $72.58/bbl (-$0.51/bbl on previous), though we still expect significant volatility
- With the year almost over, our 2021 demand growth forecast is unchanged at 5.54 million b/d. For 2022, the EIA and IEA expect demand growth in the region of 3.4 million b/d
- Downside demand risks remain, but without further information on the omicron variant, estimating its effect is intractable
- We trim our 2021 supply growth forecast to 1.5 million b/d (-80,000 b/d on previous). Petrobras has raised cape...
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by Graham Walker // 30 November, 2021
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