ANZ forecasts for oil prices ahead of Monday and Tuesday’s OPEC+ meetings

ANZ are expecting expect further drawdowns in global inventories ahead:

The outlook for road transportation fuels is improving strongly ahead of the northern hemisphere’s summer driving season. 

  • High vaccination rates have seen restrictions ease and mobility increase in the US and Europe.
  • In fact, gasoline demand has now exceeded 2019 levels in many areas.
  • This may be partly offset by weakness in Asia,which is suffering a wave of COVID-19. 
  • This should offset concerns of additional Iranian oil hitting the market

We see demand outstripping supply in the order of 650kb/d and 950kb/d in Q3 and Q4 respectively. This includes 0.5mb/d increase in Iranian output.

OPEC is likely to take a cautious approach at (its) meeting. 

  • We expect the scheduled increase of 840kb/d in July to be ratified. However,the group is unlikely to provide any guidance on output in August
  • Another 1mb/d of oil would certainly slow the current drain on inventories. This will ultimately limit the price rise

We maintain our year-end forecast of $75/bbl for Brent crude. 

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