- OPEC’s December oil market report portrayed greater optimism than earlier publications, namely with respect to the rebound in Chinese oil demand due to the relaxation of the Covid-19 restrictions in the country.
- Non-OPEC supplies are growing, largely driven by the US.
- OPEC expects Russian crude oil production to decline in 2023 by 0.8 million barrels per day (Mb/d) – a much conservative rate than the circa 2 Mb/d loss that the International Energy Agency estimated.
- The constant revisions of oil prices across the industry reflect the level of uncertainty oil markets are facing.
- The level of uncertainties are primarily influenced by how the Chinese economy will reopen (with its repercussions on oil demand) as well as other global geopolitical developments.
- The easing of inflation could signal a more relaxed monetary policy by major central banks; however, market observers should remain cautious as a more sustained decrease in inflation should take place first, rather than relying on data from a short period.
- The impact of the oil price cap on Russian crude oil is expected to be limited as long as major oil consumers, such as China, India, Turkey and the Middle East, aren’t willing to join the G7 in the cap implementation.
“Energy prices and inflation: Politics trump the economics“, Dr Carole Nakhle, Dec 2022
“The EU’s gas price cap“, Dr Carole Nakhle, Dec 2022
“Global Economy and Energy Markets Weekly Commentary – 15th Dec ’22“, Christof Rühl, Dec 2022