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Snapshot of global oil supply and demand: May 2022

Our dashboard explores key short-term signposts impacting oil demand, supply, and prices.

Advises clients on strategy and M&A issues across North American unconventionals, global upstream, oilfield services, and midstream, in addition to leading Energy Insights in the Americas.

Oil prices continued to grow in May, reaching $113/bbl and contributing to record-high inflation levels in Europe and the US. Fluctuations in short-term signposts compared to the prior month include:

  • Oil prices. The average Brent crude oil spot price grew to $113/bbl in May from $105/bbl in April. Crude oil prices rose further as Shanghai and Beijing began easing COVID-19-related restrictions and the EU announced plans to cut its Russian oil imports by 90% by the end of the year
  • Global oil demand. Global iquids demand increased by 0.9 MMb/d m-o-m in May to 98.6 MMb/d. Demand increased across most regions, except for Europe and Japan, which saw a decrease of 0.3 MMb/d each. Europe’s oil demand is now 0.8 MMb/d lower compared to six months earlier
  • Commercial inventories. Commercial inventories increased by 56 million barrels in May, to 4.2 billion barrels globally, mostly driven by an increase in non-OECD inventory
  • OPEC 10 production (excl. Iran, Venezuela, Libya). OPEC 10 production remained stable at 29.8 MMb/d. The slight production decrease of 0.1 MMb/d in Saudi Arabia was balanced by production increases in Kuwait, UAE, and other OPEC 10 countries. Overall, OPEC 10 output is up by 3.1 MMb/d y-o-y, however, it is still down by 0.4 MMb/d compared to January 2020
  • Non-OPEC production (excl. US shale). Non-OPEC production increased by almost 0.7 MMb/d m-o-m in May to 56.8 MMb/d. With this increase, non-OPEC production is up by 0.8 MMb/d y-o-y
  • US shale oil production. US shale oil production continued to rise slightly in May, reaching 8.6 MMb/d. Although US shale output is up by 0.6 MMb/d y-o-y, it is still below pre-pandemic levels of 9.0 MMb/d. Saying that, a continued m-o-m increase in the number of actively-drilling onshore rigs indicates an ongoing rise in activity
  • Iran, Venezuela, Libya production. Combined, production levels in Iran, Venezuela, and Libya decreased slightly by 0.3 MMb/d m-o-m to 4 MMb/d in May. This was mainly driven by Libya, where production output declined by 0.2 MMb/d m-o-m to 0.7 MMb/d
  • Market sentiment. The sustained high crude oil price is having a negative impact on the global economy, with inflation rising to record-high levels in Europe and the US. If high energy prices are sustained for a longer period, it may lead to demand destruction. On the supply side, OPEC+ producers agreed to increase their collective production by 0.65 MMb/d in each of July and August, rather than by 0.4 MMb/d per month to September as per the previous targets

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