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OPEC+ to change tack from September

Whilst OPEC+ has been failing to meet its production quotas in recent months, it will technically finish unwinding its pandemic-related supply cuts come September. We think OPEC+ will then move to a more liberal approach and allow the few members with spare capacity to produce more. This is one reason why we forecast that the Brent oil price will ease back to around $100 per barrel by year end. In view of the wider interest, we are also sending this Energy Update to clients of our Middle East and North Africa service.
Edward Gardner Commodities Economist
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Energy Data Response

US Weekly Petroleum Status Report

The rise in US crude stocks was in large part down to a drop in exports. More interesting was the jump in implied gasoline consumption, which probably reflects the recent fall in prices. This may not be sustainable if, as we think likely, Russia-related risks lead to higher crude prices later in the year.

10 August 2022

Energy Update

We’re less upbeat about OPEC oil supply

Concerns about the demand outlook have dragged the Brent crude oil price towards $90 per barrel this week. But, the supply-side concerns which pushed the price over $120 per barrel not too long ago haven’t entirely vanished. Indeed, following the OPEC+ meeting this week, we are now less upbeat on supply. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now.

5 August 2022

Energy Data Response

US Weekly Petroleum Status Report

Crude oil prices have been for a rollercoaster ride today, rising by $3 per barrel following the OPEC+ meeting, and then more than erasing those gains later on. Prices fell particularly sharply after US stocks data came out, which showed a rise in commercial stocks. But, we think investors might have missed the bigger picture, which is that stocks including government reserves fell for the 24th time this year.

3 August 2022

More from Edward Gardner

Energy Update

Europe’s gas supply looking increasingly fragile

Russia’s decision to once again cut supplies to Europe makes the region’s gas supply look increasingly precarious. The move will slow regional stock builds and keep prices historically high.

16 June 2022

OPEC Watch

OPEC Monthly Oil Market Report (June)

The gap between OPEC-10’s quota and output widened further in May, which adds weight to our view that the group will fail to fully unwind its production cuts by year-end. What’s more, whilst OPEC now forecasts a small fall in Russia’s production this year, we think it is still being too optimistic.

14 June 2022

Energy Watch

Global refinery capacity at its limit without Russia

In this Energy Watch, we argue that the refining stage of the petroleum product supply chain could become a bottleneck in crude oil supply getting through to end users in the coming months. Russia’s seaborne petroleum product exports have roughly halved since the start of the war in Ukraine, meaning the rest of the world’s already-stretched refinery capacity has got more refining to do to keep up with product demand. Assuming Russia’s product exports only partially and slowly recover, unplanned refinery outages will be a bigger than usual downside risk to our crude oil demand and price forecasts. Refinery constraints also imply petroleum product prices will command historically high premiums over crude oil prices for some time.

31 May 2022
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