ANZ's revisions to their oil demand forecasts were issued late last week.
A snippet of commentary, firstly on the demand side:
- Crude oil recorded its biggest weekly decline since early April amid rising concerns of weaker demand.
- Demand indicators have largely held up, with global air travel improving as international borders are reopened. However, there are signs that high prices have taken the edge off gasoline and distillate demand. US gasoline demand was down around 7% y/y in July. China’s zero-COVID strategy is pushing its recovery further out.
- We have subsequently revised our short-term oil demand forecast for 2022 and 2023 down by 0.3 and 0.5mb/d, respectively. Oil demand for 2022 is now estimated to rise by 1.8mb/d year-on-year to settle at 99.7mb/d, just short of pre-pandemic highs.
And, on the supply side:
- That said, the risks of supply shortages remain high. European sanctions have yet to be fully implemented. OPEC’s meagre supply hike highlights the market’s limited capacity to handle further shortages.
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ps Check out this great post last week on oil:
And another great one, this time with more of a TA focus:
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The week's oil trading (futures) has kicked off in Chicago:
