Oil Market Snapshot – October 2020 Brent Dips Below $40/bbl as October Ends, With France and Germany Locked Down

Brent has averaged $40.48/bbl in October so far, down c. $1.66/bbl against September, as a second wave of COVID-19 infections across the OECD weighs on demand
The benchmark declined sharply below the $40/bbl mark at the end of the month as the major European economies of France and Germany went back into national lockdown
We see Brent averaging $41.71/bbl in 2020 and $50.03/bbl in 2021 (-$0.37/bbl and unchanged on previous, respectively) due to weaker demand outlook
Our global demand growth forecast for 2020 decreases to -8.51 million b/d (-290,000 b/d on previous)
Longer term, the IEA sees oil broadly maintaining its share of the global energy mix by 2030 under its "stated policies" scenario, even as growth in renewables surges
Our global supply growth forecast for 2020 decreases to -6.6 million b/d in 2020 (-80,000 b/d on previous) due to revisions to OPEC NGL output
Libya's production is returning at pace while demand looks weak, leaving OPEC+ to contemplate extension of the current level of cuts into 2021
On current forecasts, global inventories grow by 1.14 million b/d in 2020 on average (+40,000 b/d on previous) as demand lags supply

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