Macro oils short-term outlook: November 2022 Report

Commodity Market Report 09 November 2022

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Report summary

Brent increased in October after two months of decline. We expect further gains this quarter as the strict EU oil import ban on Russian crude goes into effect in early December. Also, the Biden administration’s US SPR sales are ending this quarter and OPEC production is due to decline this month. Finally possible cutbacks in supply from Russia in the wake of the price cap would add support to prices. Highlights of the Monthly Update include: US Lower 48: growth begins accelerating into Q4 Guyana sees success as production continues to ramp up in the Stabroek block Global oil demand to increase 2 million b/d year-on-year for 2023 after downward tweaks Key geopolitical developments in the market

Global supply: limited changes to the outlook as market waits for renewed OPEC+ cuts to bite
- Non-OPEC supply: near-term upgrades to Russia and US Lower 48
- US Lower 48: growth begins accelerating into Q4
- OPEC supply: key producers expected to fall in line with 2 million b/d OPEC+ cut agreement
Global demand: The path to global demand recovery is beset by many obstacles
- 2022: China oil demand contracts this year, tempering the global recovery
- 2023: Annual growth impact by economic slowdown
- 2024: Global demand recovers on an economic soft landing
- Risks to the outlook