BAKU, Azerbaijan, October 28. Oil stocks build-up is expected to accelerate towards H1 2023, Trend reports October 28 with reference to the Oxford Institute of Energy Studies (OIES).
Nevertheless, OIES experts note that product stocks are starting from a very low base hindering the overall stocks recovery in 2023.
“We forecast a 0.4 mb/d surplus in 2022 and a -0.3 mb/d deficit in 2023. Despite the OPEC+ cuts, the projected market surpluses in H2 2022 and H1 2023 are upgraded by 120,000 b/d to 1.1 mb/d and by 170,000 b/d to 700,000 b/d, respectively. While market uncertainty remains elevated, the high/low band to the global balance risks in 2023 has narrowed significantly from previous month by 1.6 mb/d in favor of weaker market conditions (the supply/demand gap now ranges between -1 mb/d and 2.1 mb/d), as the risk of sustained market surpluses beyond H1 2023 rises,” reads the latest report from the Oxford Institute.
Global oil supply growth is downgraded to 4.6 mb/d in 2022 from 4.8 mb/d forecast previously and to 1 mb/d in 2023 from 1.7 mb/d.
“That is a downward revision by 210,000 b/d in 2022 and by 690,000 b/d in 2023. In response to weakening market balances and consistent with past behavior of acting preemptively, OPEC+ announced an output cut of 2 mb/d. Given that most member countries are producing well below their quotas, the cut in ‘real’ barrels is lower ranging between 880,000 b/d and 1.2 mb/d. The downward revisions to the supply outlook were moderated by a 270,000 b/d upgrade of Russian production in 2023 and modest gains in non-OPEC growth outside NAM and OPEC+, principally in Brazil and Norway.”