BAKU, Azerbaijan, April 14. Risks are growing for the oil market to remain in deficit in 2022, Trend reports with reference to Oxford Institute for Energy Studies (OIES).
“Our Reference case combined with the SPR releases sees the market building to a 0.65 mb/d surplus in 2022 compared to 0.15 mb/d in the reference and a 0.2 mb/d surplus in 2023 relative to 0.63 mb/d. Under the more severe Full curtailment case however the market fails to build a surplus in 2022 under all scenarios with the projected deficits ranging between -1.55 mb/d and -0.64 mb/d and appears only balanced in 2023 at 0.05 mb/d,” reads the recent Oil Market Outlook by OIES.
The Institute analysts note that the balance of risks points towards tighter market conditions in 2022, with the prospect of more balanced supply/demand conditions in 2023.
“Global oil demand growth in our forecast scenarios ranges between 2.2 mb/d and 2.9 mb/d y/y in 2022 and 0.5 mb/d and 1.7 mb/d y/y in 2023. Global oil supply growth ranges between 2.9 mb/d and 5.9 mb/d y/y in 2022 and 1.5 mb/d and 2.4 mb/d y/y in 2023. These scenarios consider cases in which sanctions against Russia are lifted and a maximum disruption of 3.9 mb/d, as well as the failure of Iran to return by 2023 and the release of OPEC spare capacity,” the report reads.
The US/IEA SPR releases could ease some of the near-term price pressure, but the impact on prices will be shortlived and largely dependent on size of the supply shock, OIES experts believe.
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