Macro oils short-term outlook: April 2023 Report

Commodity Market Report 07 April 2023

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Report summary

Brent prices fell into the low $70s/bbl during March, as fears of recession accelerated during the US-based banking crisis. On 2 April, OPEC+ announced another production cut. That news triggered a recovery in prices back to where they were in early March. In this report, we show how the impact of the announced OPEC+ cut means a smaller reduction than 1.66 million b/d and assess the implication for our short-term price forecasts. Highlights this month include: • Details on the OPEC+ new production target and what it means • Russia’s strong first quarter 2023 performance and what it means for the rest of the year • China still on track to show nearly 1 million b/d demand growth this year • What caused a significant downward revision to Q1 2023 US demand

Global supply: growth slows in 2023 as OPEC+ agree further production cuts
- Non-OPEC supply: strong domestic crude runs in Russia drives upward revision to 2023
- Russia extends 500,000 b/d cut through to the end of 2023
- US Lower 48: Permian production continues to grow strongly in 2023
- Lower 48 oil rig count is steady and frac fleet count has bounced back
- OPEC supply: OPEC+ agrees to additional voluntary cuts of 1.66 million b/d from May
Global demand: China underpins global growth this year despite a bumpy recovery and weakening external market
- 2023 liquids demand by key markets
- China
- US
- Europe
- Global outlook for 2024
- Risks to the outlook