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Oil Market Snapshot – October 2021

  • Brent closed at c. $84.32/bbl on the 28th October, up c. $6/bbl on where it was at the end of September, though easing by a couple of dollars on news of renewed US-Iran nuclear negotiations
  • We raise our Brent annual average forecast to $71.30/bbl in 2021 (+$2.09/bbl on previous)
  • We see prices rising in 2022 to $73.09/bbl (+$2.37/bbl on previous), though we expect significant volatility
  • Our 2021 demand growth forecast rises to 5.54 million b/d (+250,000 b/d on previous), incorporating potential gas-to-oil fuel switching, primarily in Asian economies
  • Still, supply bottlenecks and rising prices, particularly in energy, combine with COVID to provide downside risks to demand
  • The IMF has recently decreased its estimates of global GDP growth for both 2021 and 2022, for example
  • We raise our 2021 supply growth forecast to 1.58 million b/d (+70,000 b/d on previous) as various outages are easing, most notably in the US and Nigeria
  • We see the market in deficit by 2.03 million b/d in 2021, while a surplus of 1.06 million b/d will occur in 2022 if OPEC+ unwinds on schedule
  • As the OPEC+ unw...

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by Graham Walker // 29 October, 2021

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