Commodity Market Report

Macro Oils short-term outlook: August 2020

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31 July 2020

Macro Oils short-term outlook: August 2020

Report summary

The OPEC+ production cuts are working to restore balance in the market as demand climbs off the lows of April. However, as August starts, we see a pause in the recovery as signs of oversupply return. While demand is slowly recovering, the deteriorating global economy and coronavirus situation have caused a downward adjustment to our 2020 GDP forecast. In this outlook, we address the following themes: • Have production declines hit a low point in 2020? • How will the ease in OPEC+ cuts affect the supply situation in the face of the demand recovery? • Is non-OPEC production recovering as prices rise from the April collapse? • How has the pandemic’s ongoing “first wave” affected our demand outlook? • When will global liquids demand return to pre-crisis levels?

Table of contents

    • OPEC: compliance steps up in June; cuts due to ease from August
    • Non-OPEC: cuts, compliance and curtailments
    • Key revisions this month include:
    • US Lower 48: shut-in volumes ease back by the summer
    • H2 2020: Demand faces obstacles on the road to recovery
    • For 2021, total liquids demand expected to return to 2019 levels in Q4
    • Regional demand outlooks: Pandemic conditions and response set the pace of recovery
    • North America and Latin America: Continued first wave pressures recovery pace
    • Asia: China, India’s demand recovery path diverges
    • Europe: Demand recovery fraught with prospect of increasing localised lockdowns
    • Middle East: Rising oil use in power supports oil demand during the summer months
    • Risks to the demand forecast

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    Macro Oils short-term outlook August 2020 slidepack.pdf

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    Macro Oils short-term outlook August 2020 data.xlsx

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    Macro oils short term outlook August 2020 slide charts.xls

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