Macro oils short-term outlook: June 2023

The OPEC+ group agreed at its June meeting to extend the current production cut deal through 2024, with some revisions to target levels. In addition, Saudi Arabia announced a voluntary production cut of 1 million b/d for July 2023. The decision initially supported a marginal recovery in crude prices. However, persistent market concerns about the risk of economic weakness has seen Brent prices trend lower in recent days. For this outlook, our forecast for oil demand and supply remains broadly supportive for Brent prices in the second half of 2023. Highlights of this monthly update include: • Extension of OPEC+ agreement and additional 1 million b/d cut for July • Russian production remains strong despite voluntary cut targets • A two speed recovery skews demand growth towards services as manufacturing stagnates • Price outlook through 2024 with revisions in near-term