Macro Oils short-term outlook: April 2021 Report

Commodity Market Report 07 April 2021

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Report summary

At its recent meeting, OPEC+ went with a phased increase in production from May to July this year. The decision matches our expectations. It also reduces the risk of a sharp spike upward in oil prices the next several months. Highlights in the Macro Oils short-term outlook include: • Impact of new lockdown restrictions on our demand view • US Lower 48: higher prices support supply upside in 2022 • How will Bakken producers be affected if the Dakota Access pipeline is shuttered? • What's driving the differential forecasts for WTI, Dubai and Maya

Global supply: easing of OPEC+ production restraint through July in line with our assumptions
- OPEC+ maintains a cautious stance, with substantial production increases still deferred until Q3 2021
- Non-OPEC supply: upward revisions focus on North America supply in 2022
- US Lower 48: higher prices position the Permian to set new records
- Higher prices support supply upside in 2022
- Dakota Access Pipeline (DAPL) faces possible shutdown with a decision imminent
- OPEC: minor revisions as OPEC+ meeting outcome is in line with expectations
Global demand : vaccine deployment fuels the demand recovery
- Global liquids demand this year: H2 2021 strength offsets Q1 2021 weakness
- Q1 2021:
- Q2 to Q4 2021:
- 2022: Demand exceeds pre-crisis levels in H2 2022
- Risks to the outlook