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Energy Data Response

US Weekly Petroleum Status Report

The large fall in US commercial crude stocks was mostly due to a renewed rise in exports. Implied gasoline demand rose for a second consecutive week, but this failed to lift prices amid growing concerns over demand prospects. That said, we expect that risks to supply could still support prices later in the year.

17 August 2022

OPEC Watch

OPEC Monthly Oil Market Report (Aug.)

OPEC’s monthly report for August showed that the group continues to produce significantly less than its quota and we expect this trend to continue in the coming months. OPEC is clearly worried about demand due to the economic slowdown, and that’s despite news of some gas-to-oil switching in power generation.

11 August 2022

Energy Data Response

US Weekly Petroleum Status Report

The rise in US crude stocks was in large part down to a drop in exports. More interesting was the jump in implied gasoline consumption, which probably reflects the recent fall in prices. This may not be sustainable if, as we think likely, Russia-related risks lead to higher crude prices later in the year.

10 August 2022

Our view

The price of Brent crude oil slumped by about $10 per barrel on 5th July, the third largest one-day change in absolute terms since the price contract was launched in 1988. With that said, prices remain over $100 per barrel, which is, more or less, where we see them ending this year, before heading lower next year and ending 2023 at about $80 per barrel. We expect oil supply growth to outpace demand growth in the coming months, eventually dragging prices down, but we expect prices to remain historically high due to low stocks and lingering supply uncertainties. On the natural gas front, European prices will remain at close to record levels for some time due to uncertainty about Russia’s exports to Europe, which will feed into high Asia LNG prices and, to a lesser extent, US natural gas prices. (The rise in US LNG exports means that US domestic gas prices are now becoming more responsive to moves in gas prices elsewhere.)

Latest Outlook

Energy Outlook

Prices to remain volatile for now, before falling back

Energy prices will remain volatile for the next few months, but should fall back later this year as demand drops back and supply picks up. That said, the shortfall of supply over the last year or so means that energy stocks are now extremely low and will have to be rebuilt. In turn, this will support demand for a little longer than we had previously anticipated. For that reason, we have raised our year-end price forecasts, though we continue to expect reasonably significant declines.

1 February 2022