The Brent oil market is stable after the release of the monthly OPEC report

Yesterday, Brent oil was in the range of $81.7-83.4/bbl. The focus remains on the situation in the United States, where pressure is mounting on President Joe Biden, including his party.

He to solve the problem of high prices because the inflation rate in the United States is now the highest in several decades. In addition, yesterday, investors analyzed OPEC’s monthly report, which contained unfavorable estimates for the oil market: forecasts for oil demand growth in 2021 and 2022.

The OPEC secretariat lowered its estimate of global oil demand in 2021, primarily in North America, even though this figure significantly exceeded the level of a year ago in August. In addition, the forecast for oil demand in India has lowered again, although the latest data indicate the opposite trend.

At the same time, OPEC expects an increase in demand in China, which is also unexpected given the current restrictions on flights against the background of the growing number of people infected with the coronavirus.

The OPEC secretariat did not change the forecast of non-OPEC supply for 2021 and slightly lowered the estimate of this indicator for 2022. We believe that OPEC’s production forecasts for 2022 are overly optimistic, especially about Russia.

In November, the secretariat should also add a separate section on global hydrocarbon inventories to the report. It states that in the first nine months of 2021, stocks of oil and petroleum products decreased by 342 million barrels, and since June 2020 – by 938 million barrels, which means that stocks fell from June to December 2020 by about 600 million barrels.

On Friday morning, Brent is quoted slightly above $82/bbl; investors are waiting for data on industrial production in the eurozone for September and the preliminary consumer sentiment index from the University of Michigan for November. Consumer sentiment probably improved slightly in November, as the pandemic is on the decline, the labor market stabilizes, and wages are rising.

At the same time, high prices can negatively affect the mood of consumers. Therefore, we believe the absence of significant catalysts and Brent’s cost at the end of the week will remain in the current range of $ 82-83 per barrel.


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