After reaching our target of $90 in September, our end-year target remains $86/bbl. We maintain our view that August saw the largest deficit of the year and that inventory draws will transition to a slight build during the final four months of the year. Accordingly, crude backwardation should start to narrow and physical crude differentials for alternative Atlantic Basin grades should start to ease. Our balances assume healthy but slower demand growth in 4Q23 as we expect normal seasonal patterns in demand to be maintained this year. Crucially, demand restraint from rising oil prices is once again becoming visible in the US, Europe, and some EM countries. Accordingly, we believe that global oil inventories have built in September.

Speaker:

Natasha Kaneva, Head of Global Commodities Research

This podcast was recorded on October 5, 2023.

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