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.
- The subsequent drawdown in inventories in Q4 leaves the market exposed to further price spikes in 2024.
Kicking off the week: