OIES Oil Monthly – Issue 5
The new issue of OIES Oil Monthly including our latest short-term oil market outlook is now available.
This month’s featured In Focus piece focuses on the ongoing talks for the revival of the JCPOA and analyses what lifting the US sanctions means for oil markets. The potential return of Iranian supplies is not expected to disrupt prices and oil balances as the oil market appears better suited to absorb the returning Iranian barrels in H2 2021, conditional that the strong demand expectations materialise. The biggest impact will be felt on spreads and condensate prices, given the expectation of destocking and discounts on offer.
Our reference forecast for Brent is upgraded to $65.2/b in 2021 and $68.7/b in 2022. The Brent prospect is now lifted above our reference forecast for the first time since the start of the pandemic. The risks to our reference outlook in 2021 are broadly balanced, while they remain in negative territory in 2022. Global oil demand growth in 2021 is downgraded by 0.19 mb/d to 5.5 mb/d and upgraded in 2022 by 0.27 mb/d to 3.2 mb/d. Following a weaker Q1 2021, strong economic data and the acceleration of vaccine roll outs continue to paint a positive picture for a strong demand rebound in H2, albeit there remains considerable uncertainty as to whether the extent of the recovery will meet expectations. Global oil supply growth in 2021 is upgraded at 1.7 mb/d and at 4.1 mb/d in 2022. Iran’s return and higher output from OPEC+ as producers enter the final phase of their historic cut deal lead the growth, while non-OPEC supply continues to recover at a slow pace, with gains seen accelerating in H2 2021. The market is expected to remain in deficit in 2021 by 0.9 mb/d and near balance in 2022.