Macro oils short-term outlook: June 2022 Report

Commodity Market Report 09 June 2022

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Report summary

During May, global refined product margins soared to unprecedented highs. When combined with the agreement to ban Russia imports into the EU by end-year, crude oil prices climbed during the second half of the month. At the OPEC+ meeting on 2 June it was agreed to bring forward the production increase for September to July and August, lifting planned production increases for both months, but this had little downward price impact. Key highlights include: • Upward revisions to crude prices for 2022 and 2023 • Impact of EU oil embargo on Russia oil production • Continued covid measures in China slow demand recovery • Rising fuel prices effect on demand

Global supply: OPEC sets the stage for faster production increases
- Non-OPEC supply: number of downgrades overshadow upward revisions to US Lower 48 and Guyana
- US Lower 48: muted response to higher oil prices
- OPEC: OPEC+ agrees to a bigger production increase in July and August
Global demand: Global recovery under pressure from high fuel prices
- 2022: H2 2022 demand resumes a recovery pace following a turbulent Q2
- 2023: Global demand to exceed 102 million b/d by H2 2023
- Key changes/developments in product-level demand outlooks
- Petrochemical feedstock
- Gasoline
- Jet Fuel
- Diesel/Gasoil
- Risks to the outlook