Macro oils short-term outlook: February 2022 Report

Commodity Market Report 10 February 2022

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Report summary

The oil market has zoomed upward since the new year started with brief supply outages in Kazakhstan and Libya. The Russia-Ukraine crisis added more power upward to crude prices, as did the growing talk in the market of a “supply shortage”. However, we do not see such a shortage. This Macro Oils short-term outlook highlights include: • Some oil stock levels are low, but see 2022 implied stock build • Assessment of OPEC spare capacity • Upward revisions for global demand as Covid lockdowns ease • US Lower 48 production adjusted higher for 2022-23

Global supply: OPEC+ and mature producer struggles offset by increasing US onshore activity
- Russia production edges higher in January as Ukraine tensions rise
- Non-OPEC Supply: Downward adjustments to the North Sea offset North America gains
- US Lower 48: production returns to pre-pandemic levels by 2023
- OPEC: steady as it goes, agreement to roll over the current pace of OPEC+ production increases
Global demand: Recovery to proceed swiftly in 2022, but faces downside risks
- 2022 global liquids demand by region
- Asia-Pacific
- Europe
- Americas
- Russia and The Caspian
- Africa
- 2023 global liquids demand
- Risks to the outlook