Commodity Market Report
Macro oils short-term outlook: April 2022
Report summary
Our changes to the outlook for this monthly leave the supply and demand balance largely similar to our early March 2022 view with downward revisions to both Russia supply and global demand. Announcements of strategic crude oil releases from the US and IEA have tempered prices from early March highs, although fears of outright shortage could return as a source of upward price risk. The underlying fundamentals continue to show supply higher than demand for 2022 in contrast to 2021. In this monthly outlook, we review the following topics: • Our revised outlook for Russia supply • OPEC+ and non-OPEC supply response • Impact of Russia sanctions on global oil demand • Demand recovery slowing amid China’s Covid-19 lockdowns
Table of contents
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Global Supply: base case outlook for Russia supply substantially lowered
- Russia: oil production falls marginally in March, but exports remain elevated
- Non-OPEC Supply: Downgrades to Russia, Kazakhstan and Norway offset upgrades to China
- US Lower 48: OFS constraints temper growth in H1 2022
- OPEC: production increases continue as planned for OPEC+, despite ongoing market volatility
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Global demand: Global demand recovery pressured amid confluence of Russia/Ukraine conflict and China lockdowns
- 2022: Demand to exceed 100 million b/d by Q3 2022, but Q2 2022 demand will barely breach 99 million b/d
- 2023: Global demand poised to reach record highs, but at a slower pace
- Risks to the outlook
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