1. Global Supply Bound to Overtake Demand Next Year
- The US Energy Information Administration revised lower its price outlook for 2021-2022, dropping its annual 2021 Brent estimate to 68.61 per barrel, whilst WTI was lowered to 65.69 per barrel.
- Whilst lowering global demand both for 2021 and 2022 on concerns of travel restrictions extending into next year, the EIA still foresees a 5 million b/d increase this year and another 3.6 million b/d in 2022, putting the resulting tally at 101 million b/d.
- The agency sees OPEC adding 1.4 million b/d over 2022, to reach a total of 28.34 million b/d, implying that the OPEC+ deal will most probably be extended into 2023 and beyond.
- US oil production is seen to average 11.08 million b/d this year, whilst next year will see an increase to 11.72 million b/d.
2. LNG Dynamics Point to Exorbitantly High Winter Prices
Source: Thomson Reuters.
- Going against all previously established seasonal trends, spot LNG prices in Asia have risen to $20 per mmBtu despite several buyers already curbing their buying activity amidst soaring prices.
- Hurricane Ida has aggravated US supply issues that were already curtailing LNG exports (August has seen several terminal-feeding pipelines going into maintenance), bringing about loading delays.
- Supply difficulties continue to mar Asia’s LNG output, with Malaysia already notifying its Japanese customers that the potential for cargo…