Macro oils short-term outlook: June 2023 Report

Commodity Market Report 12 June 2023

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Report summary

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

Global Supply: OPEC+ surprises with a million b/d cut for July
- Non-OPEC supply: upgrades to Russia are offset by downgrades to Kazakhstan in 2024
- OPEC supply: crude oil output lowered as Saudi Arabia commits to an additional 1 million b/d cut in July
Global demand: A two speed recovery skews growth towards services as manufacturing stagnates
- 2023 liquids demand by key markets
- Global outlook for 2024
- Risks to the outlook