A short piece from ING on oil.

  • Despite concerns over demand, the oil market is holding up relatively well.
  • In its latest monthly market report, the IEA estimates that Chinese oil demand will fall by 420Mbbls/d this year, which would be the first annual decline since 1990. Chinese demand has clearly suffered due to the zero covid policy that China continues to follow.
  • Weaker Chinese demand was partly offset by the expectation that we will see a significant amount of gas to oil switching, given the high gas price environment.
  • With Russian oil flows holding up better than expected, the IEA expects that the global market will be in surplus of close to 1MMbbls/d in 2H22 and then more balanced over 2023 as the EU ban on Russian oil comes into full effect.


I posted yesterday on a likely floor at $80 for WTI:

Refilling the US SPR at WTI under $80 "places a strong floor under prices"


oil chart 34