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Brent Crude Oil Fundamentals:

  • OPEC to potentially downgrade optimistic 2022 oil[1] demand forecast on Monday
  • Effects of Hurricane Ida on oil[2] prices remains modest
  • China auctions oil reserves to shelter local refining businesses from increasing raw material prices
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OPEC Set to Downgrade Optimistic Oil Demand Forecast in Light of Delta Risks

OPEC will likely trim its forecast for 2022 global oil demand in light of increasing challenges around the spread of the Delta variant. OPEC, the International Energy Agency (IEA) and the Energy Information Administration (EIA) all produced forecasts for the remainder 2021 and all of 2022 with OPEC the most optimistic on both estimates.

Oil Weekly Forecast: The Impact of Ida, OPEC Supply Boost and China’s Oil Reserves Auction

source IEA,EIA, OPEC+ sources

Earlier this week OPEC decided to increase output by 400,000 barrels per day (bpd) for the month of October, in line with its gradual plan to reintroduce supply into international markets after drastically withdrawing supply at the start of the pandemic.

For OPEC's 2021 oil demand growth forecast to be met, global demand needs to average around 100 million bpd in the final quarter of this year – almost 1 million bpd higher than the IEA's fourth-quarter projection.

Price Effects of Hurricane IDA Remain Modest

Recent EIA figures suggest a less resilient recovery as US inventories were reduced by 1.529M up to September 3rd versus the anticipated figure of -4.612M.

Oil Weekly Forecast: The Impact of Ida, OPEC Supply Boost and China’s Oil Reserves Auction

Understandably, weekly field production fell to 10,000k from 11,500k over the period when Hurricane Ida-related disruptions were experienced.

Weekly US Field Production of Crude Oil

Oil Weekly Forecast: The Impact of Ida, OPEC Supply Boost and China’s Oil Reserves Auction

Oil Prices managed to remain relatively contained and largely traded within the weekly range despite recent developments.

It remains to be seen whether next weeks OPEC revision, should it take place, will result in reduced oil prices or maintain the current sideway direction. As

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