Global oil markets: from OPEC+ cuts to peak demand

Key takeaways:

– OPEC+ has succeeded in tilting the market balance in their favour, however many uncertainties remain particularly on the demand side. China continues to be a wild card and the global macroeconomic outlook (including the lagged effect of monetary policy) is not clear. 

– The oil price threshold that causes demand destruction is still unknown. 

– Although high oil prices do not cause inflation, they do contribute to the upward pressure on prices – which could complicate the job of central banks around the world.

– Peak demand will occur, but nobody knows when. Current forecasts are built on a wide range of assumptions which can easily change, particularly those dependent on government policies.