Crude oil: WTI may remain stable due to unstable supply
2023-02-20
■ International agencies have slightly raised the outlook for crude oil demand, but maintain a cautious view
■ The supply and demand of crude oil will be basically balanced in the future, and WTI may be supported by supply side concerns
International organizations have completed the global crude oil demand forecast for 2023 by February. The International Energy Agency (IEA) released a monthly report on the 15th, and the output increased by 2 million barrels per day compared with the previous year, with a year-over-year increase of 101.9 million barrels per day. The Organization of Petroleum Exporting Countries (OPEC) also released a monthly report on the 14th, showing an increase of 2.32 million barrels to 101.7 million barrels from the previous year, an increase of 100000 barrels from the previous month. In its short-term energy outlook for February, the US Energy Information Administration (EIA) is expected to increase by 1.11 million barrels to 104.7 million barrels from the previous year, which is basically the same as the forecast of last month (104.8 million barrels). This is mainly due to the expectation that China's demand for crude oil will increase as the economy recovers after the zero COVID-19 policy ends. However, it was pointed out that many concerns of the global economy, such as price level and monetary tightening, may put pressure on the global oil demand, and only stay at a small upward revision.
Due to political sensitivity, neither OPEC nor the International Energy Agency showed the supply prospects of OPEC countries. According to EIA forecast, the global crude oil supply in 2023 will be 101.1 million barrels per day, which is the same as last month. Based on the supply and demand outlook of EIA, it can be assumed that the supply and demand balance of world crude oil will remain roughly balanced.
In this case, the International Energy Agency held a temporary cabinet meeting on the 15th to discuss how to deal with the difficulties in energy procurement caused by Russia's invasion of Ukraine. Due to the difficulty of energy procurement, we are likely to cause a serious economic recession this winter, but this is largely due to the record warm winter in Europe. The necessary conditions for European countries to actively raise funds from countries other than Russia have not changed. The situation of insufficient supply is still continuing, and the situation of crude oil supply and demand may continue to tighten. Unless the global economic slowdown leads to a decline in demand, the crude oil futures price (WTI) is expected to remain strong.