Macro oils short-term outlook: October 2023 Report

Commodity Market Report 06 October 2023

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Report summary

The month of September saw prices increase, as expected, after the announcement early in the month that Saudi Arabia and Russia were both extending their supply reductions through year-end. Brent ended up averaging $94.20/bbl for September, up $8/bbl from an average for August of $86.20/bbl. We expect the supply deficit in H2 2023 to provide support to prices this quarter. Highlights this month focus on: • Revenge travel dominates demand growth this year as the global economy remains weak • New FPSOs and field ramp-up supports strong growth in Brazil • Drawdown of US commercial crude stocks continues • Declining rig count leads to slower growth in US Lower 48 supply

Global Supply: steady as it goes, OPEC+ make no changes to current production policy
Non-OPEC supply: upgrades to US NGLs dominates changes this month
US Lower 48 production on track to add close to 800,000 bpd in 2023
- Permian rig decline extends to Delaware basin after staying flat in recent months
OPEC supply: no change to policy as Saudi Arabia and Russia continue voluntary cuts
Global demand: Revenge travel dominates growth this year as the global economy remains weak
- Liquids demand by key markets
Global outlook for 2024
Global outlook for 2025
Risks to the outlook