Macro oils short-term outlook: November 2021 Report

Commodity Market Report 05 November 2021

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Report summary

After unusual pressure from the US administration to lift its production, at its 4 November meeting, OPEC+ announced a supply boost of 400,000 b/d for December, in line with its 18 July 2021 agreement. For OPEC+, doubts remain on the reality of the oil supply crunch. We remain cautious also as global supply looks more than adequate to meet demand. A key reason is demand remains in a recovery posture as slowing economic growth and the lingering effects of the Covid-19 pandemic on mobility dilute the upside potential of gas-to-oil switching. This Macro Oils short-term outlook highlights include: • Lower 48 activity returning to where it matters: the Permian • Global supply to exceed pre-pandemic peak in 2023 • Persistent Covid-19 in Asia impacts recovery • Latest on rising OPEC+ production

Global supply: OPEC+ rollover again, still steady as it goes
- Non-OPEC Supply: Minor changes to the outlook, US NGLs ramp up
- US Lower 48: completions outpace drilling two-to-one
- OPEC: agreement to continue existing easing of OPEC+ production cuts
Global demand: Recovery continues as storm clouds gather
- 2021 and 2022: Recovery faces headwinds
- 2023: Asia-Pacific demand growth accelerates
Risks to the outlook