Summary comments from ANZ on oil, saying that conditions are in place for even higher prices into year end and 2024.

On the supply side:

  • Production cuts, led by Saudi Arabia, stabilised the market in July but are now likely to push the market into a 2mb/d deficit in Q4.

On demand growth rising:

  • China’s demand has remained resilient, with domestic oil refiners ramping up processing to a record level last month. This has been aided by strong summer demand for fuels ... as economic activity picks up.
  • India and the US have been surprising sources of strength.
  • Global oil demand is on track to grow at 2.1mb/d in 2023, an estimate backed up by OPEC and IEA. Both energy groups warned that the oil market would shift into a significant deficit through the year-end.

ANZ conclude:

  • The subsequent drawdown in inventories in Q4 leaves the market exposed to further price spikes in 2024.


Kicking off the week:

brent oil price chart update 18 September 2023