- Lowers 2022 global oil demand by 260k bpd on China COVID-19 situation, lower OECD demand
- Lower demand, more output from OPEC+ and IEA stock releases should prevent sharp deficit
- Traditional Russian oil customers are cutting back, no signs of increased volume towards China
- Global oil inventories have decreased for 14 consecutive months
The oil market was perceived to be much tighter heading towards the latter stages of the year as inventories continue to drop, which prompted a steep backwardation in the early stages of Q1. But amid China's lockdowns and global growth worries on inflation, that has seen the more bullish outlook somewhat tempered with in recent weeks.
In the long-term, there's still a case for a structurally more bullish market for oil but for now, that sort of assurance is somewhat kept in check by the factors mentioned above.
