Today's Saxo Market Call podcast
Global Market Quick Take: Europe
Crude oil prices trade higher for a second day after the IEA joined OPEC in delivering an upbeat assessment of the short-term demand outlook. In their monthly ‘Oil Market Reports’ for June both OPEC and the IEA raised their outlook for 2023 global demand, the IEA by 0.2 million barrels a day to 2.4 million barrels a day bringing total consumption to a record 102.3 million barrels a day. Ahead of these upbeat reports, oil prices were already being supported by an improved across-market risk sentiment, and the prospect for fresh initiatives being taken by the Chinese government to support a sputtering economy.
The overall sentiment among oil market analysts has in recent month been heavily leaning to a tightening crude oil market during the second half, and following the latest production cut from Saudi Arabia, the market is slowly coming around to the idea it may happen. With supply being kept tight, the potential for a deficit is rising, not least given the prospect of stimulus supporting Chinas economy and recession worries elsewhere potentially having been priced in already. However, with almost half of OPEC’s expected 2.5 million barrels a day rise in 2023 demand being pencilled in for the next quarter, there will be some room for disappointment should demand fail to rise at that rate.