Macro oils short-term outlook: May 2023 Report

Commodity Market Report 08 May 2023

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Report summary

During April, Brent prices rose initially on the OPEC+ production cuts announced 2 April. However, prices weakened then on the US Congress debt ceiling negotiations, central bank interest rate policies and fears of recession in the US, Europe or weakening in China. Yet, the outlook for oil demand and supply remains supportive for the remainder of 2023. Highlights of this monthly outlook include: Demand growth skewed towards services as manufacturing falters Downgrades to OPEC supply outweigh upgrades to China and Russia US Lower 48 Permian rig count increases to post-covid high Short term oil price outlook

Global supply: downgrades to OPEC supply outweigh upgrades to China and Russia
- Non-OPEC supply: upward revisions to Russia and China dominate changes this month
- US Lower 48: H2 2023 set for strong growth led by Permian
- Permian rig count increases to post-covid high
- Lower 48 non-core plays saw a 25% decline in rig numbers from Dec 2022 levels
- OPEC supply: crude oil output lowered as OPEC+ voluntary cuts impact outlook
Global demand: Growth skewed towards the service sector as manufacturing falters
- 2023 liquids demand by key markets
- Global outlook for 2024
- Risks to the outlook