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Oil Market Snapshot – September 2021

  • Brent is trading around c. $79/bbl with 16% of US GoM production still out after Hurricane Ida, buoyed also by runaway natural gas prices
  • We raise our Brent annual average forecast marginally to $69.21/bbl in 2021 (+$0.54/bbl on previous)
  • We see prices rising in 2022 to $70.72/bbl (-$0.63/bbl on previous), capped around $70 by OPEC's active management
  • Our 2021 demand growth forecast eases to 5.29 million b/d (-100,000 b/d on previous), due to COVID concerns and slower growth in China
  • We decrease our 2021 supply growth forecast to 1.51 million b/d (-240,000 b/d on previous) due to the various outages currently in place in the US, Nigeria and elsewhere
  • Steady LTO activity has drawn down the stock of drilled but uncompleted wells
  • We see the market in deficit by 2 million b/d in 2021, 260,000 b/d larger than previous due to the supply outages currently affecting the market
  • For 2022, a surplus of 650,000 b/d will occur if OPEC+ unwinds on schedule, so we expect OPEC+ to debate deviating from its schedule some time in the next year to maintain prices

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by Graham Walker // 29 September, 2021

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