Oil markets: A cauldron of uncertainties

14 Oct 2022 , 01:12 PM

Key takeaways from the webinar are presented below.

• OPEC, IEA and EIA – regardless of looming fears of recession, forecast 2-4% growth in oil demand. While Indian demand growth has been stable, China, as and when opens up, may see gradual recovery.

 

• Supply issues are real – OPEC claims to have no surplus capacity, while shale supply from USA – which otherwise is a swing producer – may also not grow (financial prudence + ESG constraints with companies). Ironically, when supply is tight, Russia will find challenge to place 1.5 mbpd oil, which EU will not purchase post December 2022. India and China may not be the buyers, any further.

 

• Global refining markets are tight with only 2.3 mbpd new capacity addition forecast through CY27. Most of the capacity is integrated with downstream petrochemicals, and may present an overhang on actual product supplies. GRMs will continue staying volatile; diesel cracks in particular, to remain strong given the demand from EU.

 

• EU is crowding out Asia to purchase LNG. However, given the severe price increases, it needs to be seen how long will demand hold up.

 

• In near term, oil prices may moderate (US$80-90/bbl), still, given the strong demand and supply tightness, bullish outlook on medium term prevails.

 
Vandana Hari has over two decades of work experience, providing intelligence on global Oil & Gas markets to executives in the industry and related services, government officials & agencies as well as wealth managers. Before launching Vanda Insights in September 2016, Ms. Hari served as Asia Editorial Director at S&P Global Platts, a leading provider of information on the global energy, petrochemicals, metals and agricultural markets; in this role, she oversaw news and pricing operations of regional commodities, and led the company’s business strategy and external stakeholder engagements.
Ms. Hari has a Bachelor’s degree in Science from India’s MD University, and holds a post-graduate diploma each in communication and social journalism. Her expert opinion is featured in the international as well as Asian print media. She writes a monthly column in the Nikkei Asian Review. Additionally, Ms Hari is also an Insights Contributor on Smartkarma.