The International Energy Agency (IEA), OPEC, and the U.S. Energy Information Administration all forecast a tightening oil supply in the second half of the year.
- Jul 12, 2023, 6:00 PM CDT
Traders' reactions remain largely muted, as they continue to focus on macroeconomic factors like China's economic recovery and U.S. inflation rates.When Saudi Arabia announced at the June OPEC meeting that it will reduce its oil production by 1 million barrels daily, traders basically brushed it off.
The International Energy Agency, which is not a big fan of oil demand, said earlier this week that despite China's uneven recovery, demand for crude on a global scale was resilient enough to lead to tighter supply in the second half of the year. The latest to forecast a market in a deficit was Standard Chartered. In the latest edition of its Commodity Roadmap, the bank said it expected demand for oil to actually continue increasing over the next few months, hitting an all-time high in August. As a result, prices will likely shoot up.
In August, however, that 1-million-bpd gap is seen widening to 2.8 million barrels daily in August. It will then narrow a bit to 2.4 million bpd in September, StanChart said.
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