BAKU, Azerbaijan, June 20. The market surplus in 2022 is unchanged relative to last month, but the supply/demand gap in 2023 deepens by -0.3 mb/d with the previously expected surpluses in H1 being entirely eliminated, Trend reports with reference to Oxford Institute for Energy Studies (OIES).
“Global oil supply is projected to grow by 4.9 mb/d in 2022 and 0.4 mb/d in 2023. Global supplies find little comfort as most OPEC+ struggle to meet their quotas, the prospects of reaching an Iran nuclear deal in the very near-term have diminished, US shale growth remains constrained by surging cost pressures and capital discipline, and non-OPEC supply elsewhere remains price inelastic due to years of underinvestment and capacity losses during COVID. In the near-term, the crude market finds some relief from the continued SPR releases, but this will be temporary,” reads the latest OIES report.
OPEC+ latest decision to advance its September output hikes in July/August offers little additional supplies, with Middle East OPEC continuing to drive the remaining monthly production increments.
“Excluding Russia, we expect OPEC+ to add 1.24 mb/d between May/August 2022, 0.35 mb/d below the headline 1.59 mb/d target, and total underproduction to reach 1.62 mb/d in August. Non-OPEC crude supply growth is downgraded to 0.5 mb/d in 2022 and -0.5 mb/d in 2023, largely reflecting the negative revisions in Russian oil production following the EU ban deal and small revisions for the US, Canada, and Norway. US growth outlook in 2022 is marginally downgraded to 0.8 mb/d from 0.9 mb/d last month and it remains unchanged at 0.6 mb/d in 2023.”