HSBC Global Viewpoint
The Macro Brief – Oil's surge
Sep 22, 2023
This podcast discusses the recent surge in oil prices, the potential impact on economic growth and demand, the correlation between Chinese oil demand and economic data, the growth of petrochemicals and uncertainty in European gas supply, and potential supply disruptions and positive news in the oil market.
11:35
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Quick takeaways
- The recent rise in oil prices can be attributed to Saudi Arabia's surprise extension of voluntary cuts in oil supply, aiming to lift prices in the long term.
- Higher oil prices could stoke inflation, prompt central banks to raise interest rates, and potentially impact demand growth.
Deep dives
Rise of Oil Prices: OPEC Cuts and Market Impact
The recent rise in oil prices, reaching $90 per barrel, can be attributed to Saudi Arabia's surprise extension of voluntary cuts in oil supply, beyond the market's expectations. Coordinated with the Russian cuts, these measures aim to lift oil prices and ensure higher prices in the long term. With a deficit of 2.7 million barrels a day already in the third quarter, the market is expected to remain in a deep deficit through the first half of 2024. Oil price forecasts have been adjusted to $90 for the final quarter of this year, with an average of $84 in 2023.
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