Oil markets have tightened in recent weeks, breaking through the $80 mark in early July and reaching a peak just under $90 last week. Forecasts for oil demand have been hiked up with stronger than expected consumption reported in June amongst advanced economies and notably from China. This has resulted in a tightening in oil markets when combined with the announcement of production cuts from OPEC+ and significant actual production cuts by Saudi Arabia. The oil market is therefore likely to be in a large deficit this quarter of around 2m b/d. There is some hope that the pressure could be eased by rising production from the US and Iran, but oil markets are likely to remain tight for some time.
Source: Bloomberg and OPEC
