Global Inventories Back to Normal, But 2022 a Concern

Demand fits will continue but be transient and only make temporary dents in the overall price trajectory. We are shifting most of our focus to supply, and whether a combination of Opec-plus and adequate investment elsewhere will be able to meet demand prospects for the next several years (with adequate inventories). We see growing discomfort, which is why we are raising our price outlook for coming years and remain firmly above consensus and the curve.

Get Used to Demand Fits for the Foreseeable Future

$70 Still Fair Value for Recently Panicky Market

Lack of H2 Demand Growth Our Key ‘Out of Consensus’ View

Just Like H2’18, Iran Will Be a Key Oil Market Variable The Rest of This Year

Growth/Inflation Expectations Will Weigh Heavily on Oil Prices

Welcome Opec-Plus News, Unwelcome Macro/Demand Realities

Near Term Standoff Resolution Needed to Keep Group on Track

Oil prices are on the doorstep of $80, which is not a surprise given our summer market balance view. We continue to see the lack of catalysts to get from here to $90-$100+, but are watching the US-Iran situation carefully. With better visibility on demand recovery, we are focusing on how sustained higher prices will begin to activate supply.