The September edition of Glenloch Energy's Oil Market Forecast ("OMF") (published on the 21st of September) sees some renewed optimism in oil demand recovery, most notably from OPEC. At the same time, Hurricane Ida is expected to significantly impact US production through both August and September further tightening the market. The first outlines of the US Democratic Party’s $3.5 trillion budget plan have started to emerge this month, providing some insights into what is in store for US producers and consumers over the next few years.
A few key points:
- The IEA, EIA and OPEC all made small downward adjustments to their 2021 demand forecast.
- OPEC raised its 2022 oil demand estimate substantially; OPEC now predicts 2022 oil demand outstripping 2019 demand, signaling a return to real demand growth next year.
- The IEA expects Hurricane Ida to impact US Gulf of Mexico into September, offsetting increased OPEC+ production.
- Both spot and future markets rebounded strongly from their drop last month, with both Brent and WTI futures through 2025 at their highest level of the year.
- The US land oil rig count continues to rise, passing 400.
- The US Democrats appear determined to keep gasoline prices low, while discouraging investment in US oil production and supporting the energy transition through a combination of regulation, taxation, and subsidies.
Access Glenloch Energy's September OMF here.