Macro oils short-term outlook: March 2023 Report

Commodity Market Report 07 March 2023

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Report summary

We are still on track to see a swift recovery to strong demand growth after the sharp decline in Q4 2022. A big 2.9 million b/d lift is forecast for Q2 2023 and that will go a way toward lifting prices also. This Macro Oils Monthly Update assesses supply as depending on the pace of non-OPEC supply growth, particularly from the Americas; the scale of supply losses from Russia, as the EU oil and product embargos start to have an impact on production; and the direction of OPEC+ policy over the course of this year. Key highlights this month focus on: • Global liquids demand recovers to 2019 levels by Q2 2023, as China demand surges • Guyana revised up as output from Stabroek block remains robust • US commercial crude inventories to turn down later this spring after steady builds • Global GDP forecast for 2023 expected at 2.2% and inflation remains a risk

Global supply: balancing Russia production cuts, non-OPEC growth in the America’s and OPEC+ policy
- Non-OPEC supply: upgrades to Russia, offset by downgrades to Kazakhstan, Canada and UK
- Russia: production has remained resilient till now, but output forecast to fall
- US Lower 48 growth remains steady in the first quarter of 2023
- OPEC supply: no change to OPEC+ strategy leads to stable production
Global demand: Major petrochemical expansions in China underpin global growth this year
- 2023 liquids demand by key markets
- China
- US
- Europe
- Global outlook for 2024
- Risks to the outlook