BAKU, Azerbaijan, March 17. Oil market is set to build large surpluses of 1.2 mb/d in the first half of 2023, Trend reports wit reference to the Oxford Institute of Energy Studies (OIES).
However, the 1.1 mb/d deficit forecast in the second half of the year, as China’s demand returns to growth and Russian disruptions settle in, will offset this surplus.
OIES said in its latest report that the oil market will be relatively balanced this year, building a surplus of 90 000 barrels per day.
“The supply/demand gap in 2023 ranges between -0.7 mb/d and 1.1 mb/d, while the recent OECD stockbuilds could reverse sooner than expected,” reads the report.
The global oil supply growth for 2023 stands at 1.6 mb/d.
“Higher than previously anticipated output from Russia in Q1 is seen offsetting weaker expectations for non-OPEC crude growth outside OPEC+ led by the US. Reduced shale activity has led us to downgrade the US crude supply outlook by 90,000 b/d to 740,000 b/d in 2023, limiting the upward adjustment to the non-OPEC growth outlook this month to 100,000 b/d to average overall at 900,000 b/d for the year as a whole. OPEC+ output policy is expected to remain unchanged for the remainder of the year,” says OIES.
The report says that the balance of risks for 2023 remains tilted to the downside by -$4/b, but negative risks are seen easing significantly in H2 by $5/b on annual basis, to less than -$2/b from -$7/b in H1.
“Demand-side downside risks associated with global economic prospects remaining lacklustre continue to dictate the balance in the very near-term, with Q2 persisting as the potentially weakest quarter in the year. But demand risks are now seen balancing out in Q4 from around -$6/b in Q2 as global demand prospects improve. Uncertainty over the disruptions in Russian supplies remains prevalent on the supply-side, capping the upside potential of annual prices in the low-$100s. The price band for the year ranges between $81.4/b and $103.9/b.”
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