BAKU, Azerbaijan, December 8. The oil supply outlook will improve over 2022 but remain tight throughout 2023 with only moderate relief from high prices expected punctuated by volatility, Trend reports Dec.8. with reference to Fitch Solutions.
“Fears of a decline in supply due to a restrictive price cap on
Russian crude are easing and loss of supply stemming from Europe’s
ban on seaborne crude is expected to be manageable. Despite
production cuts from OPEC+, and tempered US shale growth, on
balance we expect markets will be kept from tipping back into
undersupply, as consumption eases, allowing for stocks to rebuild
and paving the way for
lower prices,” the report released by Fitch Solutions reads.
The company says that the latest snapshot from Brent futures prices shows backwardation conditions (highlighting the view for a tight supply outlook) have eased sharply in so far in Q3 2022.
“A substantially weakened outlook for crude consumption contributes to our view that supply growth in non-OPEC markets particularly the US will see markets further weaken the oversupply outlook into 2023. While we expect that OPEC together with OPEC+ members will adjust production cut levels to support prices, the outlook for production growth across the Gulf Corporation Council group is expected to stay positive in support of our view for easing market tightness.”
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