Macro oils short-term outlook: July 2023

Brent prices traded in the mid $70/bbl range in June as continued weak economic signals were balanced against OPEC+ supply cuts. In July, OPEC+ announced further voluntary production reductions to support the market: Saudi Arabia extending their 1 million b/d cut from July into August; and Russia to cut supply by 0.5 million b/d in August. The agreement is symbolic, with Russia and Saudi Arabia once again at the same target production level for August and reaffirms their intent to maintain a balanced market. The market fundamentals still support price recovery through H2 2023. Highlights of this monthly update include: • Saudi Arabia, Russia and Algeria announce additional OPEC+ production cuts for August • Declining rig count results in downgrade to US Lower 48 supply outlook for 2024 • Extension of supply, demand and price analysis through 2025