Oil Market Update – Q2 2021: (OPEC+: a temporary divergence)
Macroeconomic ReportAccording to OPEC data, Q2 2021 oil demand rose by 3 percent quarter-on-quarter and a sizable 14 percent year-on-year. The outlook for the remainder of the year is consistent with previous estimates, with oil demand expected to keep growing quarter-on-quarter in Q3 and Q4 2021. Overall, only transportation fuels (jet fuel and gasoline) are showing sizable differences in demand when compared to pre-pandemic levels.
Quarterly oil market update- Q2 2017: (OPEC Discipline Waning?)
Macroeconomic ReportOil prices declined by 8 percent quarter-on-quarter in Q2 2017, the first such decline since Q1 2016. Higher OPEC oil production, mainly from Nigeria and Libya, plus continued rises in US oil production, were the primary triggers for the slump in prices. Going forward, doubts remain over OPECs ability to, firstly, maintain discipline amongst members and, secondly, prevent sizable increases in supply from Libya and Nigeria. In addition, as the recovery in US oil production continues, with US shale oil supply expected to achieve an all-time record high in the next few months, the risk to oil prices remains firmly skewed to the downside.
Temporary outages helping balance oil markets
Macroeconomic ReportTemporary outages helping balance oil markets
Oil Note: OPEC Announces Production Cuts
Macroeconomic ReportOPEC agreed to cut its own production by 1.2 million barrels per day (mbpd), to 32.5 mbpd, on 30th of November. Oil prices immediately rose by 8 percent following the announcement and could rise even further in the short term. Whether prices remain elevated will depend on OPEC implementing its agreement with discipline as well as no major rises in US shale oil supply. Overall, whilst the OPEC cuts represent an up-side risk to oil prices, due to the hurdles mentioned above, we are not revising our current forecasts just yet, but will be monitoring developments closely.
