Macro oils short-term outlook: February 2023 Report

Commodity Market Report 09 February 2023

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Report summary

The oil price is continuing to languish in the low $80/bbl area as the EU product export ban takes effect 5 February, along with a price cap plan for Russia’s product exports. For now, unless greater economic downside emerges, we are retaining our expectation for an increase in Brent prices starting in Q2 and through the rest of 2023. • China demand surges in petchem and transport sectors • Are US strategic petroleum reserves too low? • Strong Russia crude runs support production in December and January • US Lower 48: growth outlook remains steady for 2023

Global supply: OPEC+ retains wait and see approach as Russia supply so far holds up
- Impact of Türkiye (Turkey)-Syria earthquake
- Non-OPEC supply: upgrades to Russia, offset by downgrades to Norway, Canada and Brazil
- Russia production remains stable at start of year despite sanctions and price caps
- US Lower 48 growth remains steady heading into 2023
- OPEC supply: no change to OPEC+ strategy leads to stable production
Global demand: China demand surges as Covid restrictions are eased
- 2023 liquids demand by key markets
- Global outlook for 2024
- Risks to the outlook