Macro oils short-term outlook: September 2022 Report

Commodity Market Report 08 September 2022

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Report summary

Oil prices fell in August, as recession fears gripped the market, causing widespread expectations demand growth would collapse. In our updated short-term report, we expect oil demand to rise over 2 million b/d this year despite renewed Covid-19 restrictions in China and weakening economic performance in Europe and the US. Risk to Russia’s oil exports remain as a proposed price cap on Russia oil exports triggered a threat from President Putin to cut all the nation’s oil energy exports ahead of the EU Russia oil import ban that goes into effect in December. This month’s short-term report includes our views on: • The Iran nuclear deal talks and OPEC+ meeting • Status of inventories as government stock releases continue • Demand outlook as recession risk continues • Downward adjustments to Russia production for 2023?

Global supply: OPEC+ agrees a 100,000 b/d October supply cut, and hopes for Iran sanctions deal fade
- Non-OPEC supply: upgrades to Guyana are offset by downgrades to Russia and Kazakhstan
- US Lower 48: growth remains slow and steady
- OPEC supply: OPEC+ agrees to a 100,000 b/d cut for October
- Iran nuclear deal talks
Global demand: The road to global demand recovery faces obstacles
- 2022: Fuel oil demand boost outweighed by declines in China
- 2023: Outlook remains unchanged as uncertainty to the downside looms